Publication

Since 2001, India has allowed foreign direct investment (FDI) up to 26 per cent in its defense industry. This brief examines the perspectives of the various stakeholders. It also examines the international practices pertaining to foreign investment in the strategic sector, to draw inferences for the Indian context. The author argues that in view of the international practices pertaining to investment in the strategic sector; the constraints in India’s present FDI policy regulating the defense industry; various defense industrial measures having a bearing upon FDI; and the economic benefits of higher FDI, there is a need to increase the FDI cap up to 100 per cent.