With Defence Minister A.K. Antony sharply opposing raising the Foreign Direct Investment (FDI) cap in the defence sector to 49 per cent, Commerce and Industry Minister Anand Sharma today said that liberalisation will not take place before the views of all ministries are considered.
“This is a dialogue within the government. There is a view point which is in favour of the decision. The Finance Minister and I have been in favour. But defence is a sensitive sector. Our aim is for a calibrated approach,” Mr. Sharma told reporters here.
Mr. Sharma said nobody was opposed to inducting new technologies of manufacturing systems in the country.
“Until meetings are convened, the decision will not be taken up,” he stated.
Mr. Antony in a letter to Mr. Sharma has opposed the Industry Ministry’s proposal to hike the FDI cap in the sector to 49 per cent from the existing 26 per cent.
“Allowing foreign companies to set up manufacturing/ assembly facilities here would be a retrograde step as it will stymie the growth of indigenous design and development. Our dependence on foreign countries and Original Equipment Manufacturers for modern weapons will get perpetuated,” the Defence Minister wrote in the letter.
The Commerce Ministry earlier proposed hiking the FDI cap in the defence sector to 74 per cent but apparently, due to the Defence Ministry’s tough stand on the issue, it has now proposed that it be raised to 49 per cent.