New Delhi: The Union government's move to set the composite cap for foreign investment in the defence sector at 49 per cent, from earlier 26 per cent, is seeing few takers for this proposition.
Even after six months, the Defence Ministry has not yet received any fresh proposal in the defence manufacturing sector. According to Defense ministry, there are two or three proposals in the pipeline but they were being discussed before the cap in FDI of Defence sector was raised.
A senior official in the defence ministry said it is not easy for the private players to enter in the defence market since there are various impediments on the way. The investors want assurances such as the defence products manufactured by them will be regularly brought by Indian defense forces and they will also be allowed to sell their products in other countries as well.
It was during the National Democratic Alliance (NDA) regime in 2001 when the FDI cap in defense sector was first increased to 26 per cent. But the government‘s initiative has not received a much of a positive response from investors. In a statement given by Minister of State, Defence, Rao Inderjit Singh on December 16 2014 in parliament has stated that the country has received just 24.36 crore rupees of foreign investment.
Defence experts also say that there are very few chances of big investments being made in the defence sector in near future.
