‘Increasing FDI in defence dangerous’ | Business Line

‘Increasing FDI in defence dangerous’ | Business Line

Online comments:
Coming from former Defence
Minister, who has still some credibility left, common man will be tempted to
buy Antony’s arguments against raising the FDI cap in the defence sector to 49
per cent from 26 per cent  and may not
verify them with para 17 of the budget speech which reads asunder:
“17. India today is the largest
buyer of Defence equipment in the world. Our domestic manufacturing capacities
are still at a nascent stage. We are buying substantial part of our Defence
requirements directly from foreign players. Companies controlled by foreign
governments and foreign private sector are supplying our Defence requirements
to us at a considerable outflow of foreign exchange. Currently we permit 26 per
cent FDI in Defence manufacturing. The composite cap of foreign exchange is being
raised to 49 per cent with full Indian management and control through FIPB
The dependence on Defence
manufacturing  units outside India is
more dangerous than on units with full Indian management and control. Increased
domestic Defence production will also open up opportunities for price and
quality related competition among suppliers. Besides saving precious foreign
exchange, the initiative will improve job opportunities in the production and
ancillary sectors.
FDI in sectors like Defence should
be seen from a different perspective as compared to FDI in retail where India is
not dependent on other countries for technology or skill.
M G Warrier, Mumbai


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