India has unveiled its plan to restart economic activity post-COVID-19 with a series of announcements by the finance minister Nirmala Sitharaman. and is using this as an opportunity to reform different sectors and improve the ease of doing business.
In the fourth part of her announcements on 16th of May, Sitharaman announced measures affecting the aerospace, defense and space industries. One that caught headlines was the clearance to increase foreign direct investment (FDI) in defense to 74% from 49%. The other significant developments were the opening of the space sector to private players, rationalization and opening of airspace over India and corporatization of the Ordnance Factories Boards (OFB).
While the step on increasing the FDI is not going to shock the industry, it is a welcome move. The present announcement changes the limit for foreign companies to have 74% ownership automatically without any government clearance.