Moving ahead with reforms, the government Wednesday approved allowing FDI in defence production and non-core areas of the Railways. For defence production, the FDI cap will be 49 per cent, while in the Railways it will be 100 per cent.

The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi. It come just two weeks after the one raising the cap of FDI in insurance from 26 per cent to 49 per cent.

The FDI ceiling in the sensitive defence sector was hiked to 49 per cent from 26 per cent, with the condition that the control of joint ventures manufacturing defence equipment will remain in Indian hands.

This is aimed at boosting domestic industry in India, that imports up to 70 per cent of military hardware.



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