Swedish firm gets 100% FDI in defence  

Sweden’s Saab is reported to have become the first foreign company to secure 100% Foreign Direct Investment (FDI) in India’s defence projects. The company plans to establish a new facility in India for the manufacturing of shoulder-fired rockets.

India currently permits up to 74% FDI in the defence sector through the automatic route, with clearance for higher levels possible on a case-by-case basis. While regulations were relaxed in 2015, no foreign firm had obtained permission for 100% FDI in defence until now.

The new Saab facility, named Saab FFV India, is registered to manufacture the latest generation of the Carl-Gustaf M4 system. This marks the first time Saab will produce the Carl-Gustaf M4 outside of Sweden, and the facility is expected to be located in Haryana.

Shoulder-fired rockets are widely used by the Indian armed forces, as well as by countries such as the United States and European nations for targeting fortified enemy positions, armour, and personnel.

In 2016, French firm DCNS was the first foreign company to seek approval for 100% FDI to establish a subsidiary aimed at developing advanced systems to enhance the underwater endurance of submarines, but it did not receive permission for the investment.