India’s defence industry received foreign direct investment (FDI) of a meagre USD 2.18 million during 2018-19, the Parliament was informed on Wednesday. In 2014-15, 2015-16, and 2017-18, the sector attracted FDI worth USD 0.08 million, USD 0.10 million and USD 0.01 million, respectively, according to data given by Commerce and Industry Minister Piyush Goyal in a written reply in the Lok Sabha.
In 2016-17, the industry had failed to attract overseas investments. The other sectors which received nil inflows during the last fiscal include photographic raw film and paper, and coir. As per the current policy, foreign investment beyond 49 per cent is permitted through approval route in defence sector.
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The FDI limit for defence sector has also been made applicable to manufacturing of small arms and ammunitions covered under Arms Act, 1959. Overall FDI inflows declined for the first time in the last six years in 2018-19, falling 1 per cent to USD 44.37 billion as foreign investments fell significantly in telecommunication and pharmaceutical sectors.
A strong inflow of foreign investments helps improve the country’s balance of payments situation and strengthens the value of rupee against global currencies, especially the United States (US) dollar. Replying to a separate question, the minister said that a representation/request regarding establishment of an industrial park at Kolar Gold Fields has been received.
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Source: Financial Express