India ups FDI cap in defense to 74%—big change coming soon
India is about to let foreign investors own up to 74% of defense firms with existing licenses under the so-called automatic route (up from 49%), making it way easier for global partners to invest.
The new rules could also drop a condition that foreign investment beyond 74% is allowed only if it "results in access to modern technology," and could remove the requirement for export-focused companies to set up local maintenance.
All this could be enacted in the next couple of months.
Why should you care?
Even though India has pulled in $765 billion in total FDI, barely any of that—just $26.5 million—has gone into defense so far.
But with exports hitting a record $2.6 billion in 2024/25 (the 2024-25 fiscal year) and big names like Lockheed Martin and Airbus already on board, the government's betting these changes will boost jobs, tech, and production.
By 2029, India wants its defense sector producing $33 billion worth of gear and exporting $5.5 billion—a huge leap that could open up fresh career paths and innovation opportunities for young Indians.