New Delhi: Foreign investment up to 49 per cent in defence sector, that results in change in ownership of a company, will need prior FIPB approval even though the government has put such investments under automatic route.
"Infusion of fresh foreign investment within the permitted automatic route level, in a company not seeking industrial license, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor will require government approval," according to the press note issued by the DIPP today.
The Department of Industrial Policy and Promotion (DIPP) has notified the recent easing of FDI norms in 15 sectors, including defence, single brand retail broadcasting and construction development.
On November 10, the government relaxed foreign direct investment (FDI) norms in the defence sector by allowing FDI up to 49 per cent under automatic route and beyond that through the FIPB's approval.
The government has also done away with the earlier requirement of mandatory permission from the Cabinet Committee on Security (CCS) beyond 49 per cent.
Portfolio investment and investment by FVCIs will also be allowed up to permitted automatic route level of 49 per cent.
The move is aimed at boosting domestic industry of the country which imports up to 70 per cent of its military hardware.
Sectors where FDI norms were relaxed include LLPs, aviation, plantation, single brand retail, broadcasting, NRIs, and domestic manufacturers
