Photo of Anuj Prasad

Head, Aerospace and Defence and Partner in the General Corporate Practice at the Delhi office of Cyril Amarchand Mangaldas. Anuj advises on acquisitions, joint ventures, strategic alliances and exchange control regulations, with a sectoral focus on defence and aerospace. He can be reached at anuj.prasad@cyrilshroff.com

REVISED FDI LIMIT IN DEFENCE - Impact and Opportunity

On May 16, 2020, as part of the economic packages being announced to revive the Indian economy in the wake of the COVID-19 pandemic, the Finance Minister announced that the automatic route limit for foreign investment in the defence sector will be raised from 49% to 74%. This had been a long-standing demand of the foreign original equipment manufacturers (OEM) lobby, stating unease in transferring high-end, proprietary technology to Indian entities that they cannot control. Therefore, the Government’s move is definitely a positive step, which should accelerate foreign investment in the sector, but the impact of certain other aspects of the present regulatory regime may dampen this positive sentiment. This post discusses the various factors that would impact OEM decision making around investing in the India’s defence sector, and further steps that should be taken to make high-end technology transfer to India a reality.
Continue Reading REVISED FDI LIMIT IN DEFENCE: Impact and Opportunity