India Permits 74% Foreign Ownership in Defense Companies

India Permits 74% Foreign Ownership in Defense Companies

Over the last dccade India has invited foreign investment in most sectors and now permits 100% ownership by foreign companies in many areas. Financial Services, Media and Defense have been sacred, however (not too different from many developed countries).

As part of the reforms related to $266 billion package announced by India last week, Finance Minister Nirmala Sitharaman said that  foreign companies can now own up to 74% of a defense operation in India.  Many global companies have been reluctant to expand into India with 49% ownership. This change widens the gates considerably. We expect some of the Defense News 100 companies to take a closer look at building out factories in India as a result.

At the same time she announced plans to convert the aging Ordnance Factories spread across the country into corporations whose stock will ultimately trade on the Indian stock market. These departments make guns, parachutes, ammunition and much more and many were first built by the British rulers of India, as much as 100 years ago. India’s government already owns many corporations in key sectors outside of defense: Bharat Heavy Electricals Ltd (BHEL), Nuclear Power Corporation of India Ltd (NPC).  The department of defence production owns airframe makes Hindustan Aeronautics Ltd, Bharat Electronics Ltd, ECIL and BDL among otheres.




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