Easing Of Foreign Equity Cap In Defence Mulled

The ministry of defence is exploring the possibility of allowing more than 26 per cent foreign equity participation in private companies executing production contracts in the defence sector.

The government could allow around 49 per cent foreign ownership in the sector. Highly placed officials in the ministry said that although as of now, no company has directly approached the ministry for considering any such proposal, the government was aware that 26 per cent in the sector was not enough to attract foreign investment and technology transfer.

Meanwhile, the ministry of defence has cleared Larsen & Toubro (L&T) , Mahindra & Mahindra (M&M), Max Aerospace & Aviation (MAA) and Ramoss India for executing defence production contracts. All these companies have been issued Letter of Intent (LoI) for commencing production.

 

In all eight LoI were cleared among which L&T had applied for four. These were for manufacture of combat vehicle along with sub systems and turrets, radar, war ships, and armaments.

M&M had applied for light armoured multi-purpose vehicles, and surveillance vehicles. Ramoss India has received letter of intent for manufacturing bullet proof vests & jackets and body armours, while MAA will be manufacturing military aircraft.

The ministry had received a total of 15 application of which eight were cleared. Notable among the ones which are yet to receive LoI was the Jindal group.