Stock of Bharat Electronics Ltd surged 7.62 percent, while Astra Microwave Products rose by 7 percent. Shares of BEML gained 4.99 percent on the BSE.

The move is aimed at boosting domestic industry of the country which imports up to 70 per cent of its military hardware.

FDI ceiling in the sensitive defence sector has been hiked from current 26 percent, with the condition that the company seeking permission of the government for FDI up to 49 percent should be an Indian company owned and controlled by Indians.

Further, foreign direct investment proposals above 49 percent will have to seek the approval of the Cabinet Committee on Security on "case to case basis, wherever it is likely to result in access to modern and state of the art technology in the country," according to the press note of the Department of Industrial Policy and Promotion (DIPP).

Latest News  from Business News Desk