With the Indian Commerce Ministry suggesting hike in FDI in defence sector from 26 per cent to 74 per cent, Defence Minister A K Antony today said higher FDI could be considered "on a case-to-case basis" but not done as a standard policy as the industry was not "mature enough".
"At the moment it (policy on FDI in Defence) is 26 per cent. Our Defence Production Policy (DPP) is evolving over the years...But at the moment we feel Indian defence sector is not
mature enough...not ready to absorb more FDI in defence sector. We feel that time is not right to further expand it," Antony told reporters after addressing Navy Commanders here.
At the same time, he said, higher FDI in defence sector could be allowed "on a case-to-case basis" and that "ultimately, forever I cannot rule out (higher FDI)."
He was responding to a question on Commerce Ministry's suggestion that FDI in defence sector be raised to 74 per cent from the existing 26 per cent to augment resources for greater acquisition of equipment for the armed forces.
"Commerce Ministry has brought out a discussion paper only. The Commerce Minister himself said it is a discussion paper. We can discuss. There is no problem. You should not
think there is a clash (between the two ministries)," Antony said.
Initially, the Defence Minister said, the Public Sector Undertakings had 100 per cent monopoly in the defence sector.
But the policy was changed this decade to first allow 100 per cent domestic private participation and later 26 per cent FDI.
The foreign players in the defence sector have been making a forceful plea for a hike in the FDI limit, eyeing the over USD 50 billion Indian defence spending expected over the next five years.