In the report submitted to the Lok Sabha on Friday, the Committee was of the view that the government should examine the possibility of increasing limit of FDI up to 49 percent in the defence sector in view of the fact that national interest reign supreme in defence related matters.

India's top trade bodies have already been demanding the government to enhance the present limit of FDI in the defence sector to attract foreign investors. However, the Defence Ministry has contended that any increase in FDI level beyond 50 percent would imply management control of foreign investors and such ventures might fail to deliver at critical junctures. This opinion of the Ministry was stated in view of the sanctions imposed by foreign governments.

The Committee has also asked the government to set up an expert committee at the earliest to review the existing procurement procedures so that the capabilities and expertise available with the defence industries in the country can be gainfully utilized.

The Parliamentary Committee has lamented saying the government's policy initiatives for creating public-private partnership and indigenous development in defence sector have not suitably reflecting. The committee also asked the government to take appropriate steps in this direction. The share of private players in defence purchase in the last year was a meagre 23 percent.

It may be mentioned here that India opened up its defence procurement sector for domestic private parties in May 2001 when National Democratic Alliance regime was at the helm of affairs. The then government had set FDI permissible up to 26 percent.#