2 min readNew DelhiApr 29, 2010 08:26 PM IST
First published on: Apr 29, 2010 at 08:26 PM IST
The domestic defence equipment industry’s demand to allow 100 per cent FDI in the defence sector should be evaluated properly by the government before reaching at a consensus,industry body Assocham said today.
The industry has been asking the government to allow 100 per cent FDI in the defence sector in a view to give a fillip to the domestic manufacturing units.
The chamber has proposed that initially foreign direct investment up to 49 per cent should be allowed in the sector,instead of 100 per cent.
Consensus has yet to emerge on hiking FDI ceiling in defence from current level of 26 per cent as the Ministry of Defence itself is opposed to the idea due to security reasons,Assocham President Swati Piramal said.
Defence is an extremely sensitive sector as India has not yet fully geared up to absorb private equity of 100 per cent in the sector,she added.
India can acquire self-reliance in defence production with raising FDI ceiling to 49 per cent and subsequently this could be increased to 100 per cent FDI,it said.
Further,it said,the defence offset policy is expected to bring in USD 10 billion during the 11th Five-Year Plan period as every foreign company is required to spend 30 per cent of the value on offsets goods or services purchased from Indian defence companies.
Piramal said a host of Indian firms can get the benefit of the offset policy.
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