Hailing the decision of Modi government to permit 100% Foreign Direct Investment (FDI) in Defence sector, Brig Anil Gupta, State Spokesperson of Bharatiya Janata Party said that the increase from 49% to 100% has been necessitated due to poor response of foreign investors so far. It will give boost to the domestic defence industry, which is highly capital intensive, and save valuable foreign exchange since India imports 70% of its defence equipment. India is the largest importer of arms, ammunition and other defence equipment. In the new policy, FDI limit for defence sector has also been made applicable to manufacturing of small arms and am munitions. Drawing a parallel with China, Brig Gupta said that just a decade ago China was similarly placed as India when it decided to set up domestic defence industry with foreign participation. Today, the Chinese Armed Forces are equipped with the most modern weapon systems produced domestically and China is also one of the major exporters of defence equipment.
Reacting to the statement of former Defence Minister AK Antony, Brig Anil Gupta said, “The contention of Mr. Antony that the increase in FDI is not in national interest is not only wrong but faulty as well. Unfortunately, Mr Antony is speaking like a Congressman and not a former Defence Minister. Opposing each and every decision of Modi government is a political compulsion of Congress and not based on logic. I have only one question for those who term it against national interest. Is dependence on imported equipment in national interest or reliance on indigenous production? The decision is not only in national interest but a major step towards making the Indian Armed Forces self-reliant.” It will give a big boost to Make in India and result in rejuvenation of domestic defence industry. The availability of latest and modern technology will give a fillip to in-house research and development.
Foreign investment beyond 49% (and upto 100%) has been permitted through the government approval route, in cases resulting in access to modern technology in the country. Brig Gupta also hailed the decision to remove the condition of access to “state of the art” technology as the condition was vague and discouraged foreign investors due to ambiguity. The government has also put in place many regulatory mechanisms to ensure that the equipment is manufactured in India rather than just assembling the equipment in India. This will also create jobs and address the problem of unemployment in the country remarked Brig Gupta.
