The Indian defense industry has received $2.18 million during 2018-19, Commerce and Industry Minister informed the Lok Sabha on June 26th in this regard in a written reply. The Union Cabinet Minister further informed that in 2014-15, 2015-16, and 2017-18, the sector attracted FDI worth $0.08 million, $0.10 million and $0.01 million, respectively that reflects the results taken by the government to attract FDI in the defense sector. Replying to a separate question, the minister said that a representation or request regarding the establishment of an industrial park at Kolar Gold Fields has been received.

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According to the current investment policy, foreign investment beyond 49 per cent is permitted through the approval route in the defense sector. The FDI limit for the defense sector has also been made applicable to the manufacturing of small arms and ammunition covered under Arms Act, 1959.

Overall FDI inflows declined for the first time in the last six years in 2018-19, falling 1 per cent to $44.37 billion as foreign investments fell significantly in telecommunication and pharmaceutical sectors.

A strong inflow of foreign investments helps improve the country's balance of payments situation and strengthens the value of rupee against global currencies, especially the United States (US) dollar.