Article Posted on : - Feb 06, 2011

NEW DELHI (PTI): The Defence Ministry has said it will stick to its stand of not increasing the Foreign Direct Investment (FDI) limit from 26 to 49 per cent in defence sector even as a group of ministers is likely to give its final view on the issue soon.

"Final view on the issue is likely to be taken but as far as the Defence Ministry is considered, we will stick to our stand," Defence Minister A K Antony told reporters here on the sidelines of the C-130J induction ceremony on Saturday.

The Defence Ministry has been opposing proposals moved by the Commerce Ministry to increase the FDI limit from the present 26 per cent to 49 per cent to attract more foreign investors in the country.

A "group of 2-3 Ministers" is considering the proposal and is likely to take a final view on the issue soon.

Recently, the Department of Industrial Policy and Promotion had suggested FDI cap in defence sector to be raised to 74 per cent saying 100 per cent overseas investment would be desirable.

Industry chambers have also been demanding increase in foreign investment limit in the defence sector to 49 per cent for growth of the domestic industry as foreign companies were also reluctant to invest without getting a significant degree of control in the new entities.

India is the 10th largest defence spender in the world and depends on over 70 per cent imports for its requirement.