Reuters, January 16 report, India is considering easing restrictions on foreign investment in its defense industry, further promoting "Make in India" and boosting defense exports. According to sources, the new regulations may allow existing defense enterprises with licenses to increase the foreign equity cap from 49% to 74% without government approval. At the same time, India is considering abolishing two related restrictions: one requires that when foreign ownership reaches 74%, it must also invest in "modern technology." Experts said the wording of this clause is unclear. The second restriction requires export-oriented defense manufacturers to establish domestic maintenance and support facilities. Experts pointed out that export-oriented companies can outsource related maintenance measures, which could further attract foreign investment. Analysis indicates that India's defense exports have reached an all-time high, but foreign investment has been extremely limited. In the 2024-25 fiscal year, India's defense exports increased by 12% year-on-year to a record $2.6 billion, while foreign equity investment in the defense sector was only $26.5 million, far below the total foreign investment of $765 billion. In addition, the Indian Ministry of Defense requires an increase in defense spending by 20% in the 2026-27 fiscal year budget, which could put pressure on government spending. In this context, the Modi government may seek to leverage the huge potential of foreign investment in the defense sector to alleviate the pressure of insufficient domestic financial investment.
Original article: toutiao.com/article/1854627110572044/
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