Sweden’s Saab has reportedly become the first foreign company that has bagged 100% FDI in India’s defence projects. According to a report by the Economic Times, Sweden’s Saab will set up a new facility in the country that will manufacture shoulder-fired rockets.
Citing sources, the English Daily added that the ₹500 crore FDI proposal was cleared last month. Mint could not independently verify the report.
Currently, India allows only 74% FDI in the defence sector under the automatic route. Beyond that, clearance can be obtained on a case-by-case basis. However, the clearance rules were relaxed in 2015, still, no foreign firm was able to get permission for 100% FDI in defence.
The Government has liberalized and allowed FDI under automatic routes up to 74% and up to 100% through Government routes wherever it is likely to result in access to modern technology.
India received foreign direct investment (FDI) worth $3.21 million in defence industries during the April-September period in FY 2023. The sector had attracted $2.36 million in foreign investment in 2021-22, $0.63 million in 2020-21, $2.20 million in 2019-20, $2.18 million in 2018-19 and $0.01 million in 2017-18, according to Centre’s data.