The foreign direct investment limit in the defence sector should be raised to at least 49 per cent, if not 74 per cent, to help the country become one of the major defence producers of the world, Commerce & Industry Minister Anand Sharma has said.

“I am in favour of raising FDI in defence to at least 49 per cent if not 74 per cent and this is what my department has recommended,” Sharma told presspersons on the sidelines of CII’s annual general meeting on Wednesday.

The Commerce & Industry Ministry had initially recommended raising the FDI limit in the defence sector from the present 26 per cent to 74 per cent. But the proposal was met with opposition from the Ministry of Defence that argues that it could lead to security concerns.

Prominent industry chambers, including CII and FICCI, have supported a smaller hike in the FDI limit in defence to 49 per cent as they feel increasing it to 74 per cent in one go could go against their interests.

“I assume we have the support of Indian producers. FDI of 26 per cent is definitely low. I recommended and will continue to strive for higher FDI in defence. There has to be a partnership between the Government and industry,” Sharma said.

On the issue of FDI in the retail sector, the Minister said major global retailers including Tesco, Carrefour, Auchan and Sainsbury had shown interest in investing in India and it was only a matter of time before FDI in retail starts flowing in.

“The policy (FDI retail) was announced just a few months back. It takes time for investments to come in,” the Minister said when asked why the country had not received any application for FDI in multi-brand retail.

Sharma confirmed that the sixth edition of the consolidated FDI Policy will be announced this week by the Department of Industrial Policy and Promotion (DIPP) Secretary.

>amiti.sen@thehindu.co.in

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