Indian companies taking keen interest in defence manufacturing: Finance Minister Arun Jaitley

NEW DELHI: Stating that many Indian companies are taking a keen interest in the defence sector, Finance Minister Arun Jaitley on Tuesday told ET Now. "We have opened up the defence sector and we want to start defence manufacturing in India."

"A large number of major Indian corporate groups are now taking a lot of interest in setting up defence manufacturing establishments in India," he said.

In the past Jaitley has said he is becoming a little optimistic because "a flurry of activities" is taking place in the sector.

"You see foreign investors partnering with domestic manufacturers, takeovers have started, large groups are now taking interests in entering that particular field," he had said in March.

Prime Minister Narendra Modi opened a window for majority foreign ownership in defence companies, pointing to an important policy shift just months after India raised the FDI limit in the sector to 49%.

Modi, for whom domestic manufacturing is a key strategic goal, has tied any increase in the FDI limit to another important goal, the acquisition of the latest technology that in the long run will help India become a self-sufficient arms producer in the most crucial areas.

"We have raised the permitted level of FDI to 49%. This can go higher, if the project brings state-of the art technology," the PM had said earlier this year at Asia's largest air show, Aero India, in Bengaluru.

In August 2014, the FDI limit in defence was increased from 26% to lure foreign defence suppliers to set up manufacturing facilities in a country that is the world's largest arms importer.

(With inputs from PTI)