Welcoming the government's resolve to liberalise foreign direct investment (FDI) in the defence sector, the Confederation of Indian Industry (CII) on Tuesday said the proposed move will create more opportunities within the country by helping create jobs and boost manufacturing sector growth.
The industry chamber pointed out that a meager $4.8 million worth of FDI had come to India under the 26 per cent cap ever since the defence sector was opened up for the private sector participation.
"We fully endorse the government's initiatives of linking FDI with exports from India. No business can be sustained for the long term just on the basis of domestic orders. There is an immediate need to revisit export policy," CII president Ajay Shriram said.
"FDI is directly linked with core national priorities such as raising manufacturing growth to 25 per cent of GDP, significant job creation and bringing high-end technology into the country," he added.
Addressing the first joint sitting of Parliament after the recent Lok Sabha elections, President Pranab Mukherjee on Monday said the government will introduce new policies including liberalised FDI in defence to strengthen and develop a strong indigenous defence industrial base.
"In order to attract investments in the defence sector, higher FDI cap, wherein the foreign investor having majority equity, will act as a catalyst. Higher FDI will definitely help in creating a vibrant domestic defence industrial base in the country. We congratulate the Government for initiating forward looking policy measures."