Government for 100% FDI in defence

[Choppers]

Government for 100% FDI in defence​

SUJAY MEHDUDIA
NEW DELHI, March 25, 2010

In a potential policy shift of enormous significance, the Manmohan Singh-led government is considering a proposal to open up the defence manufacturing sector for 100 per cent Foreign Direct Investment (FDI) by allowing big global players to set up production facilities in the country.

According to a note circulated within the Commerce Ministry and sent on to the Cabinet Secretariat for discussion, “established players” in the armament industry should be encouraged to set up their manufacturing facilities and integration of systems in the country by permitting 100 per cent equity through the FDI route.

“There need not be any commitment on procurement and these enterprises would have to participate in the RFP [request for proposal] to technologically qualify and also succeed in financial bidding. In case of such firms, we should permit 100 per cent FDI under the FIPB/CCEA approval route,'' the proposal says.

With the stated intent of cutting down the role of “touts and middlemen'' in weapons deals, the note says: “For future RPFs by the Ministry of Defence, the country could impose a condition that the successful bidder would have to set up the system integration in India with a minimum percentage of value addition. The successful bidder should be allowed to bring equity fully through the FDI route without any restriction.''

Taking note of concern over availability or reliability of supply during war, the note says that conditions could be imposed that the Government of India has the right to expropriate a manufacturing facility in case of need for reasons of national security by paying suitable compensation.

“There can be concerns about passing of the equipment, designs or source code to enemy countries. Such a possibility exists even in the case of imported equipment. In fact, in the case of indigenous equipment, we can control the production mechanism in a much better manner. The government could also reserve the right to inspect or control the production and dispatches in these facilities through deployment of necessary security agencies. Export to enemy countries could be banned through a negative list,'' it states.

TECHNOLOGY TRANSFER

Referring to the advantages of easing the FDI cap, the note says this would provide significant incentive for transfer of knowhow or technology, leading to higher levels of technological expertise. In fact, there is bound to be spinoffs in terms of absorption of technology in other areas of civilian use. Worldwide, military technology is considered as a source of mother technology.

The Hindu : News / National : Government for 100% FDI in defence

 

[Bingo!]

I believe few russian , isreali and european companies will be soon seen manufacturing in India like being, grippen with tata sort of thing.


F-16s - made in India wont be that long...

 

[lhuang]

You think L+M will set up a plant in India to make 126, or maybe 200 planes?

I HIGHLY DOUBT they will make planes there for export to other countries.

 

[Justin Joseph]

I don't think govt will do it. It's an absurd idea.

We should increase the limit of FDI from 26% to 49% that's it.

The 26% limit is affecting us and if we do 100% that will be the extreme. Our capabilities will get greatly affected, future get spoil and corruption will rule.

 

[manish123]

The Goras will come with even 49%.This policy will ruin india and its indigenous military developments.Our navratnas will get killed if this sort of crony capitalism will follow and we will always be at war with imagined enemies like America is today.I think MMS is selling India's crown jewels and making us a lackey of the Goras once again.

 

[Bingo!]

You think L+M will set up a plant in India to make 126, or maybe 200 planes?

I HIGHLY DOUBT they will make planes there for export to other countries.

maybe not the complete thing but as it includes 1000 of parts a majority can come to india.we are not talking about countries here, but major arms manufacturing companies, for whom money is what matters and cost effectiveness is foremost. You are Chinese, u surely know it very well since Chinese are among the best business people around for some time now.

I don't think govt will do it. It's an absurd idea.

We should increase the limit of FDI from 26% to 49% that it.

The 26% limit is affecting us and if we do 100% that will be the extreme. Our capabilities will get greatly affected, future get spoil and corruption will rule.

Its not like they are going to interfear in daily activities,. its just like Hyundai or BMW setting up R&D and production facility which we already have.


And its nice to have a few people from the nation working on R&D, also this can create competition among the manufacturers which leads to quality, reduction in prices, more jobs, better relationship with countries in Europe, Americas etc.

I don't see how it can affect our capabilities or can lead to corruption. In-fact it can lead to more intense capability and more professionalism.

 

[Bingo!]

The Goras will come with even 49%.This policy will ruin india and its indigenous military developments.Our navratnas will get killed if this sort of crony capitalism will follow and we will always be at war with imagined enemies like America is today.I think MMS is selling India's crown jewels and making us a lackey of the Goras once again.

Goras are already here to sell you your favorite drink, sell u your favorite mobile, sell you the computer you use, etc etc..

let them come and produce some world class machinery with their expertise.


to buy or not is a government decision and they are not going to sell anything in local shops.

 

[manish123]

Goras are already here to sell you your favorite drink, sell u your favorite mobile, sell you the computer you use, etc etc..

let them come and produce some world class machinery with their expertise.


to buy or not is a government decision and they are not going to sell anything in local shops.

These things dont equate to national security sir, Goras will come with their tails between legs even with 49% but not american Goras.We dont need them.We have european Goras and russian Goras and Israeli semi Goras if they want to come which are enough for us.
From ur own example look what happened to cold drink industry in India.Not a single Indian brand left.Basically this bizzare scheme is from the US whose lackey MMS will insure that when americas economic downfall really starts its military industrial complex will be transferred to india and our own Navratnas will be killed.Any major power like US, russia or china never allow free run to foreign companies in defence. They are paranoid. We will be US rent boy fighting their wars.Privatization is no panacia for all decisions esp national security.Our private companies will also be killed systematically since they are just babies right now as regards defence.49% is absolutely okay for eveybody.

 

[jha]

100% is ridiculous ...i am all for 49%...