Allow 100 per cent FDI in defence sector, says Assocham

NEW DELHI: The government should allow 100 per cent FDI in defence sector so that the country can become self-reliant in production and encourage technology transfers, industry body Assocham has said.

At present, India imports about 70 per cent of its defence requirements.

"We must recognise that defence production is a capital and technology intensive-sector. To develop a strong industrial base in the country, we need foreign capital and technology," Assocham said.

Currently, 26 per cent Foreign Direct Investment (FDI) is allowed in the sector.

India can acquire self-reliance in defence production with raising FDI ceiling to 100 per cent, the chamber said.

"The present cap on FDI in the sector has kept away both investments and technology transfer. There is no reason why we should not allow 100 per cent foreign investment in defence sector," Assocham Secretary General D S Rawat.

FDI along with usage of advanced technology is a better option for manufacturing defence equipment domestically rather than importing them from abroad, he added.