Archive · 16 Jan 2026
DPIIT Considers Easing FDI Norms for Defence
The Department for Promotion of Industry and Internal Trade (DPIIT) in India is thinking about making it easier for foreign companies to invest in Indian defence companies.
Right now, foreign companies can own up to 49% of a defence company without needing special permission.
The government wants to increase this limit to 74% for companies that already have a licence.
This change is to make the rules the same for both new and old defence companies.
The government had already made this change for new defence companies in 2020.
The goal is to attract more foreign investment in the defence sector.
DPIIT is considering increasing the FDI limit for defence companies with existing licences from 49% to 74% under the automatic route.
The government had earlier liberalised FDI rules for defence companies with new licences, raising the limit from 49% to 74% under the automatic route.
The proposed move aims to bring parity in the FDI regime for both new and existing investments in the defence sector.
FDI in the defence sector was liberalised in September 2020 to attract foreign investment.
The current FDI limit for defence companies is 49% under the automatic route and above 74% through the government route.
- Who
- Department for Promotion of Industry and Internal Trade (DPIIT)
- What
- Considering increasing FDI limit for defence companies with existing licences from 49% to 74% under the automatic route
- When
- Not specified
- Where
- India
- Why
- To bring parity in the FDI regime for both new and existing investments in the defence sector
- Department
- Department for Promotion of Industry and Internal Trade (DPIIT)
- Current FDI Limit
- 49%
- Proposed FDI Limit
- 74%
- Route
- Automatic
- Sector
- Defence
- Previous Liberalisation
- September 2020
- Purpose
- Bring parity in FDI regime for new and existing investments