 "CII welcomes govt resolve to liberalise FDI in defence")
The industry chamber pointed out that a meager $4.8 million worth of foreign direct investment (FDI) had come to India under the 26% cap ever since the defence sector was opened up for the private sector participation.
"We fully endorse the government's initiatives of linking FDI with exports from India. No business can be sustained for the long term just on the basis of domestic orders. There is an immediate need to revisit export policy," CII President Ajay Shriram said.
More From This Section
"FDI is directly linked with core national priorities such as raising manufacturing growth to 25% of GDP, significant job creation and bringing high-end technology into the country," he added.
Addressing the first joint sitting of Parliament after the recent Lok Sabha elections, President Pranab Mukherjee yesterday said the government will introduce new policies including liberalised FDI in defence to strengthen and develop a strong indigenous defence industrial base.
Defence procurement system has been hit hard by delays and scams in the recent years allegedly due to lack of transparency and complicated long procedures.
"India's own defence procurement will act as an incentive for foreign Original Equipment Manufacturers to set up facilities in the country. This should catalyze both the development and the influx of high-end technologies and efficiencies into the country which can be used to pioneer innovations across multiple sectors," Shriram said.
"In order to attract investments in the defence sector, higher FDI cap, wherein the foreign investor having majority equity, will act as a catalyst. Higher FDI will definitely help in creating a vibrant domestic defence industrial base in the country. We congratulate the Government for initiating forward looking policy measures," he added.