Compulsion---Important meeting on FDI in defence, other issues tomorrow
Commerce and Industry Minister
Anand Sharma is expected to discuss hiking of FDI cap in the
defence sector as well as other issues related to foreign
direct investment with Finance Minister P Chidambaram
"A meeting has been scheduled between both the ministers
for tomorrow. The Commerce and Industry Minister may discuss
the issue of increasing FDI ceiling in defence and on
redefining FDI and FII," according to an official source.
Sharma is pitching for hiking FDI cap in defence to 49
per cent from the current 26 per cent.
India is one of the largest defence importers in the
world with a minuscule component of exports. India at present
imports over USD 8 billion worth of such equipment and its
defence budget is growing at an average of 13.4 per cent
annually since 2006-07.
According to sources, Sharma is also likely to discuss
matters related to redefining FDI and foreign institutional
investment (FII) to remove ambiguities.
On this, the Reserve Bank is expected to soon come out
with a discussion paper.
Chidambaram, in his Budget speech, had proposed to follow
the international practice with regard to defining FDI and
FII. According to the proposed definition, if an investor has
a stake of 10 per cent or less in a company, the investment
would be treated as FII. And if an investor has a stake of
more than 10 per cent, it would be treated as FDI.