INDIA: ASSOCHAM Seeks 100 percent India FDI in Defence

Monday March 26 2012

The Industry body, the Associated Chamber of Commerce and Industry of India (Assocham), has called for allowing 100 per cent India (FDI) foreign direct investments in the defence sector to develop a domestic industrial base, to encourage technology transfers and curb large-scale imports.

With a budget outlay of Rs 1.8 lakh crore, India imports nearly 70 per cent of its defence requirements.

The Industry body has been reported as saying that defence production is a capital and technology intensive sector, and to develop a strong industrial base in the country, foreign capital and technology are both needed. The current 26 per cent cap on India FDI has kept away both.

The body has also called for the government to reconcile contradictions and align all relevant policies. Clarity is needed on what a defence product is and this definition should cover the final product (not components) and have a direct link with lethality or high end technology.

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