New Delhi: As many say, it was a ‘war’ between defence ministry and Commerce ministry on FDI hike in defence sector. And the proposal of the commerce ministry was finally over ruled in the cabinet committee headed by the Prime Minister Dr.Manmohan Singh.Now,FDI cap in defence sector will remain at 26% and proposals beyond that will be considered by the Cabinet Committee on Security (CCS) on case to case basis, according to a government decision.

"FDI cap is 26% in defence sector, that stands like that. Any FDI proposal beyond 26% which brings state-of-the-art technology, that proposal would be considered by the CCS," commerce minister Anand Sharma told reporters in New Delhi.

Commenting on the decision, defence ministry officials said depending on the quality of the technology on offer, the CCS will take a call on the proposals for FDI in defence sector.

Antony is said to have written to Sharma opposing any move to raise the cap to 49% earlier. Opposing commerce ministry's hike proposal, Antony had said that it will be a "retrograde" step and "stymie" the growth of the domestic industry while increasing dependence on foreign manufacturers.

The commerce ministry had earlier proposed hiking it to 74% but apparently due to defence ministry's tough stand on the issue, it has now proposed it to be 49% which was rejected by the defence Ministry.

The defence minister recently said that "Indigenisation of military hardware is the ultimate answer" to avoid controversies such as the chopper scam. and asked the armed forces to change their mindset of relying on imports to meet operational requirements.