Lok Sabha Question No. 2287 (UNSTARRED), answered on 2016-07-29
Subject: FDI in Defence Sector
Ministry: DEFENCE
Asked by: CHINTAMAN NAVSHA WANAGA, V. PANNEER SELVAM, OM BIRLA, BHOLA SINGH, UDIT RAJ, BHANU PRATAP SINGH VERMA

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF DEFENCE PRODUCTION

## LOK  SABHA UNSTARRED QUESTION NO.2287

TO BE ANSWERED ON THE 29 TH  JULY, 2016

## FDI IN DEFENCE SECTOR

2287.  ADV.. CHINTAMAN NAVASHA WANAGA:

SHRI  V. PANNEERSELVAM:

SHRI  OM BIRLA:

SHRI  BHOLA SINGH:

DR. UDIT RAJ:

SHRI BHANU PRATAP SINGH VERMA:

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Will the Minister of DEFENCE be pleased to state:

- (a) the total Foreign Direct Investment (FDI) made in the country during each of the last three years and the current year;
- (b) the FDI proposals received from various foreign and domestic companies during the said  period  and  the  action  taken  by  the  Government  thereon,  company  and  country-wise including Korea;
- (c) whether the Government has allowed 100 per cent FDI in the defence sector;
- (d) if  so,  the  details  thereof  along  with  the  benefits  likely  to  be  accrued  as  a  result thereof; and
- (e) whether the Government has taken precautionary measures before opening up of the defence sector for private players and if so, the details thereof?

## A    N    S    W    E    R

MINISTER OF DEFENCE                                      (SHRI MANOHAR PARRIKAR)

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(a) to (e): A Statement is attached.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA UNSTARRED QUESTION NO. 2287 FOR ANSWER ON 29.7.2016

The  total  Foreign  Direct  Investment  (FDI)  made  in  the  country  during each of the last three years and the current year is at Annexure-'A'.

2. List of FDI proposals received in Foreign Investment Promotion Board (FIPB) under defence sector during the last three years and the current year is at Annexure-'B'.
3. The  Government,  recently,  vide  Press  Note  No.5  (2016  series)  dated 24.06.2016  inter-alia  reviewed  the  FDI  Policy  in  Defence  Sector.    Foreign Investment  up  to  49%  is  allowed  through  automatic  route  and  above  49% under Government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.   The foreign investment in defence  sector  is  further  subject  to  industrial  license  under  the  Industries (Development & Regulation) Act, 1951.
4. The amendments made in the policy could be the most trusted route to technology transfer  which  would help in  increasing the  defence production base and providing the much needed impetus to self-reliance and indigenization in defence sector.
5. Foreign  investment  above  49%  is  permitted  in  cases  wherever  the proposal  is  likely  to  result  in  access  to  modern  technology  or  for  other reasons  to be recorded. Such  proposals  are  considered by  Foreign Investment  Promotion  Board  (FIPB)  based  on  the  security  clearance  of Ministry  of  Home  Affairs  (MHA)  and  comments  of  Ministry  of  Defence. Foreign  investment  in  Defence  sector  is  subject  to  the  grant  of  Industrial License  under  the  Industries  (Development  and  Regulation)  Act  1951,  by Licensing  Committee,  an  inter-ministerial  body,  which  among  other  things, also takes into account security clearance by Ministry of Home Affairs (MHA) and views of Ministry of Defence (MoD).
5. *******

ANNEXURE-'A'  REFERRED  IN  THE  REPLY  GIVEN    IN  THE  STATEMENT  IN PARTS (a)  TO  (e)  OF  LOK  SABHA  UNSTARRED  QUESTION  NO.  2287  FOR ANSWER ON 29.7.2016

Total Foreign Direct Investment (FDI) made in the country during each of the last three years and the current year:

(In US$ million)

|   S. NO. | FINANCIAL YEAR          | FDI IN FLOW   |
|----------|-------------------------|---------------|
|        1 | 2013-14                 | 36,046        |
|        2 | 2014-15                 | 45,148        |
|        3 | 2015-16                 | 55,457        |
|        4 | 2016-17 (Upto May 2016) | 7,456         |

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ANNEXURE-'B'  REFERRED  IN  THE  REPLY  GIVEN    IN  THE  STATEMENT  IN PARTS (a)  TO  (e)  OF  LOK  SABHA  UNSTARRED  QUESTION  NO.  2287  FOR ANSWER ON 29.7.2016

Year 2013:  08 proposals:

|   Sl. No. | Name of the company                                       | Country     | Action taken   |
|-----------|-----------------------------------------------------------|-------------|----------------|
|         1 | M/s Mahindra & Mahindra Limited                           | USA         | Approved       |
|         2 | M/s Bharat Electronics Limited                            | France      | Approved       |
|         3 | M/s Amertec Systems Pvt. Ltd.                             | Israel      | Approved       |
|         4 | M/s Pipavav Defence and Offshore Engineering Company Ltd. | Mauritius   | Approved       |
|         5 | M/s NSE Industries                                        | France      | Approved       |
|         6 | M/s Maini Precision Products Pvt. Ltd.                    | Mauritius   | Approved       |
|         7 | M/s Indian Rotorcraft Limited                             | Netherlands | Approved       |
|         8 | M/s BF Elbit Advanced Systems Pvt. Ltd.                   | NRIs FII    | Approved       |

Year 2014:  10 proposals:

|   Sl. No. | Name of the company                                        | Country     | Action taken   |
|-----------|------------------------------------------------------------|-------------|----------------|
|         1 | M/s Sasmos Het Technologies Ltd., Bangalore                | Netherlands | Approved       |
|         2 | M/s Quest Global Manufacturing Private Limited, Bengaluru. | Mauritius   | Approved       |
|         3 | M/s Samtel Thales Avionics Limited                         | France      | Approved       |
|         4 | M/s Verdant Telemetry & Antenna Systems Pvt. Ltd.          | FII / NRI   | Approved       |
|         5 | M/s Maini Precision Products Private Limited.              | Mauritius   | Approved       |
|         6 | M/s Bharti Shipyard Ltd.                                   | FII / NRI   | Approved       |
|         7 | M/s Solar Industries India Limited, Nagpur.                | FII / NRI   | Approved       |
|         8 | M/s Idea Forge Technology Pvt. Ltd.                        | FII / NRI   | Approved       |
|         9 | M/s Punj Lloyd Limited.                                    | USA         | Approved       |
|        10 | M/s Thales India Pvt. Ltd.                                 | Hong Kong   | Approved       |

…….2/-

Year 2015:  10 proposals:

|   Sl. No. | Name of the company                                 | Country         | Action taken    |
|-----------|-----------------------------------------------------|-----------------|-----------------|
|         1 | M/s Dynamatic Technologies Ltd.                     | NRI / FII       | Approved        |
|         2 | M/s Mahindra Telephonic Integrated Systems Limited. | USA             | Approved        |
|         3 | M/s Indian Rotorcraft Limited.                      | Netherland      | Approved        |
|         4 | M/s BF Elbit Advanced Systems Pvt. Ltd.             | Israel          | Approved        |
|         5 | M/s Safran Engineering Services India Pvt. Ltd.     | France          | Approved        |
|         6 | M/s Fokker Elino B.V. Netherlands                   | Netherlands     | Automatic Route |
|         7 | M/s Menon Bearings Limited                          | Not mentioned   | Rejected        |
|         8 | M/s Sikorsky Aircraft Corporation                   | United States   | Does not lie    |
|         9 | M/s Verint India Systems Pvt. Ltd.                  | United Kingdoms | Rejected        |
|        10 | M/s Rolta Meprolight Private Limited                | India           | Withdrawn       |

Year 2016:  04 proposals:

|   Sl. No. | Name of the company                 | Country        | Action taken   |
|-----------|-------------------------------------|----------------|----------------|
|         1 | M/s Tata Sikorsky Aerospace Limited | Singapore      | Approved       |
|         2 | M/s Indian Rotorcraft Limited       | India          | Deferred       |
|         3 | M/s DCNS                            | France         | Deferred       |
|         4 | M/s Quantum Technologies LLC.       | United Kingdom | Approved       |

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