FOREIGN DIRECT INVESTMENT IN DEFENSE SECTOR.

INTRODUCTION

• DEFENSE  MANUFACTURING INDUSTRY  IS ALSO ONE OF THE MAJOR SECTOR IN INDIA WHICH WAS EARLIER PUBLIC BUT AS TIME PASSED ITS NOW BOTH PUBLIC AND PRIVATE TOO 
• IN THIS SECTOR GOVERNMENT HAS HOLD MONOPOLY FOR A LONG TIME 
• THIS SECTOR WAS RESERVED FOR PUBLIC UNIT MAY 2001 WHEN THE SECTOR WAS OPENED UP 100% FOR INDIA PRIVATE SECTOR PARTICIPATION WITH FOREIGN DIRECT INVESTMENT UP TO 26% BOTH SUBJECT 
• IN 2016, THE DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE (DPI IT), MINISTER OF COMMERCE AND INDUSTRY ALLOWED FOREIGN DIRECT INVESTMENT UNDER AUTOMATIC RULE UP TO 49%AND ABOVE THROUGH GOVERNMENT AUTHORIZATION .

IMPORTANCE

•  TOPMOST PRIORITY HAS BEEN ACCORDED TO THIS FOR PROCUREMENT OF CAPITAL EQUIPMENT .
• A SEPARATE PROCEDURE FOR 'MAKE -ll'  CATEGORY HAS BEEN NOTIFIED UNDER DPP.
• IN DEFENSE PRODUCTION TO 74% FROM EXISTING 49% UNDER AUTOMATIC ROUTE IN MAY 2020 .
  
• COMPANIES SEEKING NEW  DEFENSE LICENSE CAN AVAIL OF THIS PROVISION AND BY GOVERNMENT ROUTE IT WILL  BE 100%
•  THIS PROCEDURE HAS A NUMBER OF INDUSTRY FRIENDLY FOR CONSIDERING PROPOSALS SUGGESTED BY INDUSTRY ,MINIMAL DOCUMENTATION, ETC. THIS  IS BEING DONE TO BOOST SELF RELIANCE IN DEFENSE PRODUCTION.
• INVESTEE COMPANY SHALL BE STRUCTURED TO BE SELF-SUFFICIENT IN THE AREAS OF PRODUCT DESIGN AND DEVELOPMENT . INVESTEE OR JOINT VENTURE COMPANY SHALL HAVE THE MANUFACTURING FACILITY , MAINTENANCE AN LIFE CYCLE SUPPORT FACILITY OF PRODUCT BEING MANUFACTURED IN INDIA.

• OFFSET GUIDELINES HAVE BEEN MADE FLEXIBLE , NOW EVEN IN SIGNED CONTRACTS INDIAN OFFSET PARTNERS AND OFFSET COMPONENTS CANE BE CHANGED .
• INVESTMENTS IN DEFENSE SECTOR WILL BE SUBJECT TO SCRUTINY THE RIGHT TO REVIEW ANY FOREIGN INVESTMENT IN THE SECTOR THAT MAY AFFECT THE NATIONAL SECURITY.
• TO FACILITATE THIS AND  'OFFSET PORTAL ' HAS ALSO BEEN CREATED IN MAY 2019 . THIS WOULD URGE DOMESTIC INDUSTRIES TO MANUFACTURE THESE ITEMS LOCALLY.

CONCLUSION :

• THE REFORMS THAT HAVE BEEN INTRODUCED BY GOVERNMENT TO PROMOTE FDI IN THE COUNTRY AI  TO COMPLEMENT AND SUPPLEMENT THE DOMESTIC INVESTMENT
• TH FDI HAS BENEFITED THE DOMESTIC COMPANIES BUY WAY OF ENHANCING ACCESS TO SUPPLEMENTARY CAPITAL AND STATE OF ART TECHNOLOGIES. 
• TIMELY REVIEW ARE DONE AND CHANGES ARE INTRODUCED IN FDI POLICY .
• INDIAN GOVERNMENT HAS MANAGED TO ATTRACT FOREIGN INVESTMENT IN INDIA .