Government considering 49 per cent FDI in select defence areas: Antony
20 Sep 2008
Mumbai: The government would consider allowing foreign direct investment of up to 49 per cent in the defence sector ''on a case-to-case basis,'' defence minister A K Antony said.
''We will stick to the policy of allowing 26 per cent FDI in Indian defence sector. We will consider allowing 49 per cent FDI only on a case-to-case basis, if the industry is able to convince us,'' Antony told an Assocham seminar on defence procurement policy.
While the earlier defence procurement policy was selective in the case of companies, he said the present government favoured openness in its defence deals.
''With the implementation of the Defence Procurement Procedure-2008 (DPP-08), we will ensure every industry gets the tender details. That way we ensure transparency and also widen the vendor base,'' he said.
''We believe in open deals. There will be no more veil of secrecy in the request for proposals. Details would be made available to all industry representatives by placing the tenders on the net, except in the most sensitive cases, which is a minuscule number,'' he said.
Quality and affordability of prices alone would guide defence procurement, the minister said, adding that the government believed openness would ensure speedy procurement.
The way forward for modernising the armed forces and meeting emerging challenges is to open up the defence sector and also indigenise defence production through absorption of latest technologies and it is in view of this that the ministry is considering the Assocham proposal for increased FDI ceiling in defence production, he said.
The minister, however, clarified that the increased FDI ceiling in defence sector would be considered on case to case basis.
He also said the government would also review the Offset Policy in view of the changes in defence procurement policy.
