Page 25 - LECTURETTE TOPICS eBOOK

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• The bitter truth is that India is the largest importer of warfare since
decades. The relaxation of the rules regarding FDIs are intended to
support the exchange of knowledge and thus enhances the scope of
indigenous research with foreign collaboration.

• Apart from these statements, the government of India revealed to the
parliament that there is zero percent FDI in the fields of defence, coal
industries, and ports. These sectors failed to attract any foreign direct
investments during April-December last year.

• The government has relaxed the rules regarding FDI in defence, civil
aviation, and single-brand retail to promote foreign direct investments in
the above sectors. Statistics reveal that India imports 70 percent of its
military hardware from different countries.
• There are two ways for getting approval for investment in India. They are
• Getting investment approval from Reserve bank of India, or automatic
route.

• Getting approval from the government of India through Foreign Investment
Promotion Board or FIPB.

• Foreign direct investments are not permitted in chit funds, tobacco or
substitute products, railways, roads, atomic energy, railway operations,
real estate business, construction of farmhouses, townships etc.

Conclusion : Relaxation of rules for FDI is opposed by the majority of the Indian
corporate companies with regard to increase in competition between domestic
companies and foreign companies. The government gave the clarity that 100
percent is permitted with respect to some norms related to the exchange of
knowledge and technology. However, statistics reveal that there is no FDI in
defence sector last year.

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