New Delhi: The decision to hike FDI limit in the defence sector to 74 per cent will be a gamechanger as it will bring out the true potential of the country’s defence production capabilities, said Defence Minister Rajnath Singh on Saturday.
Singh was reacting to Finance Minister Nirmala Sitharaman’s announcement on increasing the Foreign Direct Investment (FDI) limit in defence manufacturing to 74 per cent.
As part of the structural reforms to enhance self-reliance in the defence sector, Sitharaman on Saturday announced that the FDI limit in defence manufacturing would be increased to 74 per cent from the existing 49 per cent.
“Companies from abroad will be able to invest up to a maximum 74 per cent in defence manufacturing in India, up from 49 per cent,” said the Finance Minister.
Defence Minister Singh was one of the first ones to react to the announcement, saying the FDI limit in the defence manufacturing under automatic route has now been raised from 49 per cent to 74 per cent and “this decision will unleash the true potential of Indian defence production capabilities through ‘Make in India’.
The announcements made today will prove to be a Game Changer.”
He further said: “Today’s annoucements made by Narendra Modi government will go a long way in unshackling the economy in many ways.
The corporatisation of the OFB has been the topmost priority of the government as it will improve the efficiency of our Ordnance supplies and factories.”
Representatives of the domestic defence industry, as well as strategic experts, also welcomed the announcements, saying that for a country aspiring to be a regional power, self-reliance in the defence sector was one of the most important requisites.
Indian firm JSR Dynamics Chairman and former Air Force Vice Chief Air Marshal SB Deo said the domestic industry is delighted with the announcements as it will give an opportunity to the domestic industry to realise and prove their potential.
Deo dismissed suggestions that sudden dependence on indigenous industry would hamper combat capabilities saying the move was the best decision towards strengthening warfighting capabilities of the country.
Former Director-General of Military Operations Lt Gen Vinod Bhatia said that for a country like India, the road to becoming a power in the COVID-19 scenario goes from being self-reliant in the defence industry and not being the second-largest importer of weapon systems in the world.
One of the major points of the announcements made by the Finance Minister in her fourth tranche of the economic stimulus package was that the government will not import weapons that can be manufactured within the country.
“We will notify a list of weapons and platforms for a ban on their imports and fix deadlines to do it,” said the Finance Minister, while stating that the list would be increased every year as the self-reliance in the sector expanded.
Another major point was that the government would create a separate budgetary provision for the capital acquisition of domestic products and the defence ministry would also work towards indigenising spares which are imported from foreign countries. (ANI)