Defence Industry sector was opened up in May 2001 for private sector participation. Foreign Direct Investment (FDI) limit in defence sector was enhanced in 2020 up to 74% through the Automatic Route for companies seeking new defence industrial license, and up to 100% through the Government Route wherever it is likely to result in access to modern technology. So far, Rs 5,077 crore worth of FDI has been reported by companies operating in the defence sector.
Further, the Government promotes co-development and co-production of niche defence technologies with Foreign Original Equipment Manufacturers (OEMs) to encourage FDI in the defence sector.
