The Key is Technology, Not Money

If self-reliance in defence is the stated goal, FDI is no solution. India must apply the same tools it did so successfully in space and nuclear science to acquire and develop military technology.

India’s notorious dependence on imported military hardware and the near moribund state of large parts of its public sector defence industry represent a full-blown crisis crying for a solution. India is the world’s largest arms importer and, with at least two decades of not replacing or upgrading obsolescent equipment through either purchases or indigenous manufacture, is on course now to spend around $30 billion in the next few years, and $200 billion in the medium term. For some years now, from the Atal Bihari Vajpayee-led National Democratic Alliance government in 2001 onwards, the government has been veering towards increased foreign direct investment (FDI) in defence manufacturing as a solution to the defence crisis.

“The prolonged delay over finalising the Rafale deal was reportedly over disputes about the role of Hindustan Aeronautics Ltd.” Picture shows Rafale jet fighters in the Dassault factory in Merignac near Bordeaux, France. Reuters

The present Bharatiya Janata Party government, despite its rallying ‘Make in India’ cry, has further increased the FDI limit in defence, with 49 per cent now permitted under the automatic route, 75 per cent where technology transfer is involved, and up to 100 per cent in cases involving significant new technology. While some Indian companies are wary of the entry of foreign players, most favour opening up the sector with an eye to the potentially lucrative business opportunities they see opening up. Read More

Courtesy: The Hindu

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