Govt for 74 pc FDI in defence to overcome obsolescence

New Delhi, May 17 (PTI) With its weaponry facing rapid
obsoletion, the Indian government Monday proposed to raise FDI
in defence production to 74 per cent, saying it would help
ensure technology transfer and funds to effectively replace
imports, estimated at over USD 8 billion.
Mooting a discussion for raising FDI from 26 per cent in
defence production to the same level as telecom sector, the
Industry Ministry also sought to allay security concerns and
impact on domestic players, saying effective checks could be
put to tackle any "suspect" company.
Leading industry chamber CII, which had earlier asked the
government to limit FDI to 49 per cent only, declined comments
while no reaction could be obtained from FICCI.
Another industry chamber Assocham said it is a strategic
and sensitive sector and opening up FDI from 26 per cent to 74
per cent straightaway "will not be a prudent step".
Increasing FDI cap from 26 per cent to 49 per cent as
advocated by some industry associations "will not really help
us in getting the best technology partners to invest in
India... (by this) we may be accused by posterity of doing too
little and too late," the discussion paper said.
"The established players in the defence industry should
be encouraged to set up manufacturing facilities... in India
with FDI up to 74 per cent," it added. MORE PTI