Air Marshal P.P. Reddy VM, Director General (Inspection & Safety), Indian Air Force, wanted a rethink of the government’s policy of putting 26 per cent limit on foreign direct investment (FDI) in defence. “I do not think it is attractive for the foreign industry. Why do we restrict FDI? We need to ponder over it,” he said.
There have been attempts by the Commerce and Industry Ministry in the past to raise the FDI limit to 49 per cent, but Defence Minister, A.K. Antony had taken a firm stand against it. The government had stated it was ready to consider increased FDI on a case-to-case basis for induction of state-of-the-art technology.
He said aircraft, engines and equipment absorbed the major chunk of capital budget. “R&D funds should be made available to the private sector too.”
Air Marshal Reddy was speaking at the 8th international conference on Energising Indian Aerospace Industry, co-organised by CII and the Centre for Air Power Studies in association with the IAF, here.
He said the IAF was likely to procure equipment and platforms worth $150 billion in the next 15 years. Industry should be given tax holidays and offered a friendlier import and export regime, he felt.
Air Marshal Vinod Patney (retd.) Director, Centre for Air Power Studies, said India cannot become a major power without a flourishing aerospace industry. Small and Medium Enterprises (SMEs) had not enjoyed the benefits of defence offsets and government support. Therefore, they should get due attention from the government as well as large companies. The business model must undergo a change. Transfer of technology and licensed production should be looked at as a stop-gap arrangement. The FDI limit should be relaxed and the private sector’s greater involvement was required.
Published - November 07, 2013 02:08 am IST
