Antony prevails, FDI cap in defence remains 26%

[COLDHEARTED AVIATOR]

FDI cap in defence sector will remain at 26% and proposals beyond that will be considered by the Cabinet Committee on Security (CCS) on case to case basis, according to a government decision which showed that defence ministry prevailed over the commerce ministry.

"FDI cap is 26% in defence sector, that stands like that. Any FDI proposal beyond 26% which brings state-of-the-art technology, that proposal would be considered by the CCS," commerce minister Anand Sharma told reporters in New Delhi.

The commerce minister was addressing a press conference on decisions taken by a meeting headed by Prime Minister Manmohan Singh on FDI in different sectors.

The definition of state-of-the-art technology would be determined by the defence ministry, he said.

Commenting on the decision, defence ministry officials said depending on the quality of the technology on offer, the CCS will take a call on the proposals for FDI in defence sector.

The decision is on the lines of the assertion by Antony, who recently wrote to Sharma opposing any move to raise the cap to 49%.

Overruling the commerce ministry's proposal, Antony had said that "The deliberated view of the defence ministry...remains that the FDI cap in the defence manufacturing sector should remain at 26%."

At the same time, he had said that whenever FDI beyond 26% "is likely to result in access to modern and state-of-the-art technology in the country, decisions can be taken to allow higher FDI on a case to case basis by the Cabinet Committee on Security."

Opposing that proposal, Antony had said that it will be a "retrograde" step and "stymie" the growth of the domestic industry while increasing dependence on foreign manufacturers.

In his letter to Sharma earlier this month, Antony had said the FDI cap could not be raised as the country "cannot afford to be dependent on foreign companies and vulnerable to policies of their countries of origin" in the field of defence on the long-term basis.

"Allowing foreign companies to set up manufacturing/assembly facilities here would be a retrograde step as it will stymie the growth of indigenous design and development, and our dependence on foreign countries and OEMs for modern weapons will get perpetuated," he had written to Sharma.

The commerce ministry has been pushing for hiking the FDI cap in defence sector from 26%. It had earlier proposed hiking it to 74% but apparently due to defence ministry's tough stand on the issue, it has now proposed it to be 49%.

After the AgustaWestland chopper scam, the defence ministry has been stressing on the development of indigenous weapon systems for meeting the military requirements.

It changed its procurement policy and stress is now on procuring from local industry and making imports the last option.

The defence minister recently said that "Indigenisation of military hardware is the ultimate answer" to avoid controversies such as the chopper scam and asked the armed forces to change their mindset of relying on imports to meet operational requirements.

Moreover, the ministry is also planning of investing Rs. 15,000 crore for developing the capabilities of the Ordnance Factory Board and the Public Sector Undertakings under it in the next five years.

Antony prevails, FDI cap in defence remains 26% - Hindustan Times

 

[Manindra]

Saint Antony is a tough guy & he did same as I expected. Good job Sir

 

[sasi]

Good move.
Antony had said the FDI cap could not be raised as the country"cannot afford to be dependent on foreign companies and vulnerable to policies of their countries of origin" in the field of defence on the long-term basis.

 

[third eye]

Indicates a very poor image of the Govt - flip flops.

Did they not think it through before taking a decision ? Does this mean that Anthony ( & the MOD) was not in the loop while deciding.

Or

Was anthonys objections over ruled ?

The opposition is right when they call this a Govt of indecisive people.

 

[JanjaWeed]

Sounds like Govt is in the fire fighting mode. How can they go ahead & announce FDI in a sector without consulting the man who heads it? Just goes to show how this govt works... too many chiefs, not enough Indians.

Going further... i think more public / private partnerships needed to increase the efficiency in defence sector. Govt owned entities like HAL / DRDO are too complacent as there is not enough competition in the industry.

 

[Tshering22]

Good move.
Antony had said the FDI cap could not be raised as the country"cannot afford to be dependent on foreign companies and vulnerable to policies of their countries of origin" in the field of defence on the long-term basis.

And pray tell me what is coming out of the 100% Indian organizations?

Nothing. Zero Zilch.

Every weapon delivered has taken a minimum of 2 decades to reach its target.

Even with claims of upgrading, the corrupt brass in the armed forces refuses to induct the weapons.

Every news item starts like these sarkari agencies are starting some star wars weapons program but everytime we Indians are taken for a ride and we cannot do anything about it because of the guarantee and zero-accountability of idiotic bureaucrats running the defense establishments.


The government won't give anything to the private sector because with work ethics like TATA's etc these conglomerates will sweep the defense markets from the inept, lethargic and no-good sarkari PSUs.

Also a project is indefinitely delayed so that foreign weapons can be bought for fat commission in exchange for the corrupt politicians in power.

Think about the FDI. With full blown JVs like BAE and TATAs, we could get state of the art weapons ON TIME. DRDO will become a redundant agency only backed to survive by the corrupt politicians. Most hard working engineers and scientist get fed up of the work conditions and the pay in sarkari PSUs and leave for better paying private firms.


Apart from the ballistic missiles which share its origin from ISRO's hard work, and BrahMos, nothing has come in time.


Tejas: Delayed forever,
MCA: HAHAHAHA!;
Arjun: 36 years late;
Trishul: Dropped;
Astra: No sign
Nirbhay: never ending delays
Saras: Force-fed to IAF for order but NONE inducted.
Bhim: Canceled for flimsy excuses.

Do we want more examples.


I just don't understand how morons like these manage to reach the top position with even a sense of dedication.

 

[Bang Galore]

Not cut & dry. It has been raised to 49% but with a caveat that the decision are to be taken on a case by case basis. If this decision to raise FDI ceiling was not taken by the cabinet, then even individual cases could not be considered.

 

[Shabz Nist]

Thank you Anthony sir. Atleast now we know at least one patriot exists in the the center.

And pray tell me what is coming out of the 100% Indian organizations?

Nothing. Zero Zilch.

Every weapon delivered has taken a minimum of 2 decades to reach its target.

Even with claims of upgrading, the corrupt brass in the armed forces refuses to induct the weapons.

Every news item starts like these sarkari agencies are starting some star wars weapons program but everytime we Indians are taken for a ride and we cannot do anything about it because of the guarantee and zero-accountability of idiotic bureaucrats running the defense establishments.


The government won't give anything to the private sector because with work ethics like TATA's etc these conglomerates will sweep the defense markets from the inept, lethargic and no-good sarkari PSUs.

Also a project is indefinitely delayed so that foreign weapons can be bought for fat commission in exchange for the corrupt politicians in power.

Think about the FDI. With full blown JVs like BAE and TATAs, we could get state of the art weapons ON TIME. DRDO will become a redundant agency only backed to survive by the corrupt politicians. Most hard working engineers and scientist get fed up of the work conditions and the pay in sarkari PSUs and leave for better paying private firms.


Apart from the ballistic missiles which share its origin from ISRO's hard work, and BrahMos, nothing has come in time.


Tejas: Delayed forever,
MCA: HAHAHAHA!;
Arjun: 36 years late;
Trishul: Dropped;
Astra: No sign
Nirbhay: never ending delays
Saras: Force-fed to IAF for order but NONE inducted.
Bhim: Canceled for flimsy excuses.

Do we want more examples.


I just don't understand how morons like these manage to reach the top position with even a sense of dedication.

After such long tenure in this forum, i am surprised you know jackshit about Indian defense manufacturing industry.

Its not stellar. But the performance improvements have been steady. The MoD also encourages private "Indian" players in defense.

Don't you think its better to have a raytheon equivalent from India than having raytheon (US govt. Extension) itself ?

 

[AUSTERLITZ]

I think this report was before hike during speculation,they already increased it against antony protest i think.

 

[sasi]

I think this report was before hike during speculation,they already increased it against antony protest i think.

Antony okayed 49% fdi on defnece in case to case basis.
Journos screwed up the whole damn thing.

 

[Tshering22]

Thank you Anthony sir. Atleast now we know at least one patriot exists in the the center.



After such long tenure in this forum, i am surprised you know jackshit about Indian defense manufacturing industry.

My knowing is not relevant. What is there to show that is relevant.

Its not stellar. But the performance improvements have been steady. The MoD also encourages private "Indian" players in defense.

Playing the mini-sub contractor role to make parts and spares is not the kind of participation called 'private participation' while keeping the meat for PSUs.

Funny you tell me this considering that we're yet to induct any strategic platform that is made by a private firm. Name me one tank, submarine, ARV, APC, artillery gun, jet fighter, jet trainer etc made by a private firm inducted into the military.

Don't you think its better to have a raytheon equivalent from India than having raytheon (US govt. Extension) itself ?

We're talking about making AVICs, Boeings, Sukhois, Lockheed Martins my friend.

In the league where we are jumping to be promoted, we need Boeings and Lockheed Martins at least in defense. Not DRDO, ADA and HAL.

They have been given enough time to evolve and I think half a century is good enough time to move forward.


China, Japan, Korea, Taiwan and even Israel's aerospace industries have moved forward in leaps and bounds considering that Japanese were destroyed just 2 years before India got independence, Korea was flattened in 1953 and Taiwan has such limited resources.

Now Turkey is coming forward way faster than any sarkari PSU can imagine.

Whether through cooperation or through other means they are getting more and more self-reliant in many ways.

Where is HAL compared to these? Making a fighter jet is not enough; getting to induct it and use it in combat is what defines the maturity of an aerospace industry.

Why is it that HTT-40 is still on drawing board or CGI? What happened to LUH which we have been discussing for years?

Where is the frozen model of AMCA that PSUs were boasting about? As per the latest reports, it will take 14 years more. What a joke! China would be flying UCAVs by then.

And even then HAL won't deliver if working in current state.

What is happening to HAL/IL-214 project?

So you see,.... it is not about what I know...

It is what the PSUs have delivered considering the level of threats a country the size, with resources, talent and skill, faces.
So before telling me about how much I know, better take a look at the inventories of IAF, IA and IN.

Logistically, we can only give a bloody nose to the Chinese and nothing more than that.

If you think that the bravery of our men is alone sufficient then you seriously lack the understanding of modern combat.

 

[Agnostic_Indian]

it's a perfect compromise.

 

[errant]

My knowing is not relevant. What is there to show that is relevant.



Playing the mini-sub contractor role to make parts and spares is not the kind of participation called 'private participation' while keeping the meat for PSUs.

Funny you tell me this considering that we're yet to induct any strategic platform that is made by a private firm. Name me one tank, submarine, ARV, APC, artillery gun, jet fighter, jet trainer etc made by a private firm inducted into the military.



We're talking about making AVICs, Boeings, Sukhois, Lockheed Martins my friend.

In the league where we are jumping to be promoted, we need Boeings and Lockheed Martins at least in defense. Not DRDO, ADA and HAL.

They have been given enough time to evolve and I think half a century is good enough time to move forward.


China, Japan, Korea, Taiwan and even Israel's aerospace industries have moved forward in leaps and bounds considering that Japanese were destroyed just 2 years before India got independence, Korea was flattened in 1953 and Taiwan has such limited resources.

Now Turkey is coming forward way faster than any sarkari PSU can imagine.

Whether through cooperation or through other means they are getting more and more self-reliant in many ways.

Where is HAL compared to these? Making a fighter jet is not enough; getting to induct it and use it in combat is what defines the maturity of an aerospace industry.

Why is it that HTT-40 is still on drawing board or CGI? What happened to LUH which we have been discussing for years?

Where is the frozen model of AMCA that PSUs were boasting about? As per the latest reports, it will take 14 years more. What a joke! China would be flying UCAVs by then.

And even then HAL won't deliver if working in current state.

What is happening to HAL/IL-214 project?

So you see,.... it is not about what I know...

It is what the PSUs have delivered considering the level of threats a country the size, with resources, talent and skill, faces.
So before telling me about how much I know, better take a look at the inventories of IAF, IA and IN.

Logistically, we can only give a bloody nose to the Chinese and nothing more than that.

If you think that the bravery of our men is alone sufficient then you seriously lack the understanding of modern combat.

According to a recent defence-ministry audit, only 29% of the products developed by the DRDO in the past 17 years have entered service with the armed forces. The organisation is a byword for late-arriving and expensive flops.

The above is an extract from an article in the Economist and appears to vindicate the author's doubt in the abilities of PSUs to deliver the goods.( Don't shoot the messenger)

economist.com/news/briefing/21574458-india-poised-become-one-four-largest-military-powers-world-end

 

[bloo]

Correct decision, this should create pressure on PSUs and private companies to perform.