While indicating his country’s eagerness to step up defence cooperation, visiting U.S. Deputy Secretary of Defence Department Dr. Ashton B. Carter on Monday said if India raised its Foreign Direct Investment (FDI) ceiling in defence to international standards, it would increase commercial incentives to invest.
In an interactive session on “U.S.-India Defence Cooperation: The Way Forward,” organised by the Confederation of Indian Industry (CII), he also referred to India’s policy of offsets which, he said, could be helpful to growing industry capabilities – if there were the right companies, and the right absorptive capacity.
“If offsets are calibrated correctly, it works. But if offset requirements are too onerous or too narrow, they deter a company’s interest. For companies to participate, our arrangements must make good economic sense as well as good strategic sense,” Dr. Carter said.
His visit comes less than a month of U.S. Defence Secretary Leon Panetta’s to New Delhi.
India had introduced the offset policy in 2005 and the first offset contract was signed in 2007. Defence Minister A.K. Antony had told Parliament in May that the country had already attracted over $4.27 billion through defence “offsets” through arms contracts inked since October 2007.
The defence procurement policy specified that a foreign armament company, which bagged an arms deal over Rs. 300 crore, must plough back at least 30 per cent of the contract value back into India as offsets.
On the amount spent on capital acquisitions from foreign sources, Mr. Antony had said that Rs. 15,443 crore was spent in 2010-11, while the figure for 2009-10 stood at Rs. 13,411 crore. India still imports almost 70 per cent of its defence requirements because the DRDO and defence PSUs have got their act together and the private sector has also not made major foray into the defence arena. India allows 26 per cent FDI in the sector.
Terming the U.S.-India relationship as “global” in scope, Dr. Carter said that defence interests of the two countries also converge in maritime security and on broader regional issues. “I like to think of India and the United States as kindred souls. We share common values as well as common interests, and we share strong bonds in trade and technology, as well as security,” he said.
Keywords: U.S. Deputy Secretary of Defence Department, Dr. Ashton B. Carter, Indo-US defence ties, FDI ceiling in defence, U.S.-India Defence Cooperation, interactive session
Dr. Carter's comments need in depth analysis.They can be interpreted differently by different people.Some can say that the US government wants to keep its super power influence in Asia via. joining hands with India;while others can interpret this move of getting closer to India as an hedge against the rising influence of China in that part of the world.Both in their respective interpretation can be right under the circumstances.At this time, what is crucial is not the individual interpretation of this scenario or any party politics, but the security of India.We all know that India is being encircled by China with the help of Pakistan on one side, and on the other side China is getting involved in many naval projects in the neighboring countries. China is flexing its muscles in the South China Sea area, and in fact, it does not hesitate to warn the moving vessels of other countries in that part of the ocean.THIS PROPOSAL NEEDS IMMEDIATE POSITIVE CONSIDERATION.
I agree with the notion that US is an untrustworthy partner. However, this something India needs to know, and not talk about it. America's business always will be a business as they openly proclaim. With that understanding two nations can be close to each other and even be friends helping each other. Trust everybody, but not blindly, always verify. Name of the game is to push for indigenous development of weapons system. India brags about it, but unfortunately they have done very little.
why the Americans dictating Indians? Are the americans take any others' advice?.
India needs to develop a policy to develop and buy it's defence needs
domestically and raise it to 70% from the current abysmal 30%. In order
to do that we need to build the capability in both the public and
private sector. The US is an untrustworthy partner and India needs to
deal cautiously with it and ensure that we are never dependent on it for
critical needs.
So, India is the 'hot' target of the US military-industrial-complex now.
Guess what if India doesn't succumb to this pressure sooner!... bingo!!
I think it is more sales than collaboration. USA hardly gave any help
INDIA since independence. Even then, we survived. Now, USA is accosting
INDIA as a buffer against CHINA & PAKISTAN. Let's not fall into USA
trap. Pak took free USA help. We know what Pak is today
American&INDIAN interests are converging rapidly with defense industrial component manufacture as well as defense co-op itself be it NAVAL,AVIATION or ARMY.This might augur well for INDIAN DEFENSE INFRASTRUCTURAL improvement which in turn means JOB growth oriented economic growth.INDIA should welcome this.
Please Email the Editor