Foreign Direct Investment (FDI)

The COVID-19 pandemic, which has revealed the inherent weaknesses in the existing global supply chain and risks of over-reliance on China’s manufacturing industry, presents new opportunities for India to rethink its industrial strategy, especially policies concerning the growth of its manufacturing sector.

• Kogila Balakrishnan , Saurabh Kukreja
• November 13, 2020
• Issue Brief

Raising the FDI limit by itself may not enthuse the foreign investors as per the expectations. To make the defence sector more attractive for foreign investment, a whole lot of other related issues will have to be addressed by the government.

• Amit Cowshish
• September 14, 2020
• IDSA Comments

The government should set up a task force to engage with potential investors and investees and evolve a simplified FDI policy, which has different slabs for different kinds of activities and is free from terms and conditions that are difficult to understand and implement.

• Amit Cowshish
• May 04, 2017
• IDSA Comments

It is rare that a foreign company makes a huge investment to produce major platforms in a third country with a view to make that country an export hub.

• Laxman Kumar Behera
• June 22, 2016
• IDSA Comments

Under the earlier policy, the foreign portfolio investment in Indian defence industry was either banned, or capped at an arbitrary level for certain companies, causing a lot of dissatisfaction among several listed Indian companies which had pleaded their genuine helplessness in controlling such investments given their nature of flow.

• Laxman Kumar Behera
• September 01, 2014
• IDSA Comments

The proposal to relax the present cap on FDI in defence has expectedly drawn sharp reactions. Those who oppose argue that higher FDI is not required and, more importantly, it will not be in national interest, not the least because it will stymie the process of indigenization. This calls for a dispassionate analysis.

• Amit Cowshish
• June 26, 2014
• IDSA Comments

One of the provisions in the policy is that in the Information & Broadcasting and the Defence sectors, where the sectoral cap is less than 49 per cent, the company would need to be ‘owned and controlled’ by resident Indian citizens and Indian companies, which, in turn, are owned and controlled by resident Indian citizens. This is a virtual impossibility.

• Amit Cowshish
• April 23, 2014
• IDSA Comments

The MoD is possibly of the view that allowing foreign companies to set up manufacturing and assembling facilities in India will stymie the growth of indigenous design and development activities.

• Amit Cowshish
• July 16, 2013
• IDSA Comments

Most developed economies are already feeling threatened by increasing equity investments sponsored by foreign government-owned and/ or foreign government-controlled entities in the defence and high-tech industries. A coordinated government response for supervision of foreign investments will emerge on the horizon sooner than later.

• Sandeep Verma
• May 07, 2013
• IDSA Comments

Notwithstanding positive developments over the last decade, certain grey areas in industrial licensing and FDI policy need further improvement to facilitate the private sector’s more meaningful participation in the Indian defence industry.

• Laxman Kumar Behera
• January 27, 2012
• IDSA Comments