Manindra
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India attracts paltry Rs 24.36 crore foreign investment in defence despite being world's biggest arms importer
India, the leading arms importer in the world which spent more than $50 billion in the post-Kargil modernisation drive, has attracted a paltry Rs 24.36 crore ($4.94 million) of foreign direct investment (FDI) in the last 13 years.
This was revealed by none other than Defence Minister A.K. Antony in Parliament on Monday, where he said 63 applications were received for industrial licences in defence manufacturing from private companies in the last year alone.
The sorry FDI trickle into defence makes a case for relaxing the cap on foreign investment, something the defence ministry is loath to do.
The government had recently relaxed FDI regulations across sectors but retained the 26 per cent cap for the defence sector despite strong lobbying by the commerce ministry for its relaxation.
It was decided that proposals beyond 26 per cent would be cleared by the Cabinet Committee on Security (CCS). For proposals within the cap, clearance would have to be required from the Foreign Investment Promotion Board (FIPB). The CCS would look into specific projects and its potential to bring state-of-the-art technology into the country.
Major proposals that go beyond the 26 per cent cap are already in the pipeline; the joint development of supersonic cruise missile Brahmos by India and Russia is one of them.
The defence ministry has taken measures to encourage Indian private firms to venture into the defence sector in a big way by allowing foreign partners. A number of big companies have come forward in the recent years: according to the defence ministry, business houses such as Mahindras, Tatas and Larsen and Toubro are already making big strides in this sector.
The Tatas have joined hands with Lockheed Martin Aeroframe for manufacturing aero structure items for aircraft, helicopters and unmanned airborne vehicles. The Mahindras have tied up BAE Systems to manufacture and market equipment in land sector through a tie-up in 2008.
Larsen and Toubro too tied up with EADS for the manufacture and distribution of electronic warfare, military avionics and mobile systems and radars.
More Info
India, the leading arms importer in the world which spent more than $50 billion in the post-Kargil modernisation drive, has attracted a paltry Rs 24.36 crore ($4.94 million) of foreign direct investment (FDI) in the last 13 years.
This was revealed by none other than Defence Minister A.K. Antony in Parliament on Monday, where he said 63 applications were received for industrial licences in defence manufacturing from private companies in the last year alone.
The sorry FDI trickle into defence makes a case for relaxing the cap on foreign investment, something the defence ministry is loath to do.
The government had recently relaxed FDI regulations across sectors but retained the 26 per cent cap for the defence sector despite strong lobbying by the commerce ministry for its relaxation.
It was decided that proposals beyond 26 per cent would be cleared by the Cabinet Committee on Security (CCS). For proposals within the cap, clearance would have to be required from the Foreign Investment Promotion Board (FIPB). The CCS would look into specific projects and its potential to bring state-of-the-art technology into the country.
Major proposals that go beyond the 26 per cent cap are already in the pipeline; the joint development of supersonic cruise missile Brahmos by India and Russia is one of them.
The defence ministry has taken measures to encourage Indian private firms to venture into the defence sector in a big way by allowing foreign partners. A number of big companies have come forward in the recent years: according to the defence ministry, business houses such as Mahindras, Tatas and Larsen and Toubro are already making big strides in this sector.
The Tatas have joined hands with Lockheed Martin Aeroframe for manufacturing aero structure items for aircraft, helicopters and unmanned airborne vehicles. The Mahindras have tied up BAE Systems to manufacture and market equipment in land sector through a tie-up in 2008.
Larsen and Toubro too tied up with EADS for the manufacture and distribution of electronic warfare, military avionics and mobile systems and radars.
More Info
