The proposal was to allow FDI to go up to 49%, inclusive of portfolio flows, in defence production. FDI up to 26% is permissible in the defence sector, subject to licensing. However, wherever FDI beyond 26% is likely to result in access to modern and state-of-the-art technology into the country, decisions can be taken to allow higher FDI on a case-to-case basis with the approval of the Cabinet Committee on Security.
