The cap on foreign direct investment (FDI) in defence manufacturing is all set to go up to 74 per cent. This was announced by the Finance Minister Nirmala Sitharaman on May 16, 2020 as a part of the wider reforms package for eight sectors. Though not specially mentioned by her, foreign investment beyond 74 per cent will most likely continue to require the government’s permission. The decision to raise the FDI cap has taken many by surprise.
It may be recalled that in 2013 the then commerce and industry minister in 2013 had proposed to raise the cap to 74 per cent, but the ministry of defence (MoD) opposed it on the grounds that this will hamper the growth of the Indian industry. Even the NDA government found it expedient not to raise the cap beyond 49 per cent while amending the FDI policy on a couple of occasions after assuming power in 2014. The Indian industry was anyway never too warm to the idea. It seems unlikely that the MoD and the industry have had a change of heart.
The reform package announced on May 16 also includes some other measures like corporatisation of the ordnance factories board, creating a negative list of importable defence items and providing a separate budget for domestic capital procurement. The finance minister made it clear that these reforms are intended to pave the way for an Atmanirbhar Bharat – the new mantra for resuscitating India’s economy savaged by the Covid-19 pandemic.
One must, therefore, shed the past prejudices and judge the efficacy of the reforms package, especially raising of the FDI cap, by the promise it holds for promoting ‘atmanirbharta’ (self-reliance) in defence production and associated activities. Sadly, the prospects do not look very promising if the objective is to achieve self-reliance in defence. One can, of course, give a twist to this polysemic term and argue that it means something other than self-reliance, but that would be ingenuous.
この記事は Geopolitics の June 2020 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、8,500 以上の雑誌や新聞にアクセスしてください。
すでに購読者です ? サインイン
この記事は Geopolitics の June 2020 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、8,500 以上の雑誌や新聞にアクセスしてください。
すでに購読者です? サインイン
Unending War In Ukraine
Is Russia's War in Ukraine following a script or it is lost in direction? RAVI SRIVASTAVA attempts to answer
THE NARCOTICS MENACE
International Narcotics Control Board (INCB) 2023 Annual Report, prepared in accordance with the international drug control treaties, examines the global drug control situation and makes recommendations to governments and regional and international organizations. It focuses on the role of the Internet, including social media, in JALLAL TOUFIQ, President of the INCB, explores the challenges and opportunities for drug control, prevention, and treatment in the era of the Internet, with a landscape of online drug
DEALING WITH THE DRAGON
Not Containing, but Countering China, in the Indo-Pacific is now the norm of all the leading countries of the region, writes CHINTAMANI MAHAPATRA
INDIA MUST RESUME NUCLEAR TESTING
India has to conduct open ended nuclear tests to secure a modicum of data, which will be infinitely more accurate than information derived from inertial confinement fusion facility (ICF) and supercomputer simulations.
ASYMMETRIC MARITIME THREATS & CHALLENGES
VENUGOPAL MENON explains why and how it is imperative to counter asymmetric threats in the maritime domain in India's area of interest
DRDO'S MPATGM
Indian Army gets more teeth for Anti-Tank Warfare, reports GIRISH LINGANNA
SMART AND LETHAL WEAPONS: THE PATH TO 2029
India must tread the path towards development of a whole gamut of next-generation smart and lethal weapons for countering a two-front threat scenario, argues AMARTYA SINHA
ROHDE & SCHWARZ EXPANDS FOOTPRINT IN INDIA BY OPENING NEW STATE-OF-THE-ART FACILITY IN DELHI
In a strategic move to amplify its offerings and reinforce its market presence, Rohde & Schwarz India (RSINDIA), a subsidiary of the global technology group Rohde & Schwarz GmbH KG & Co, has officially inaugurated a new facility, aiming to significantly enhance its service offerings in the Indian market. The expansion heralds a pivotal moment in RSINDIA'S history, with its Managing Director, YATISH MOHAN, alongside key figures from the R&S Global Office including DR. ALEXANDER ORELLANO, Executive Vice President, and RALF WATAMANIUK, Vice President, Sales & Marketing, providing insights into the company's steady climb to prominence.
SUBMARINE-KILLER CAPABILITY: SMART MISSILE TESTED SUCCESSFULLY
The supersonic missile-assisted torpedo (SMART) system developed by the Defence Research and Development Organisation (DRDO) was successfully test-launched from Dr APJ Abdul Kalam Island in Odisha on May 1. The test confirmed velocity control, ejection, and symmetric separation.
India's space economy set to soar
India's burgeoning space economy could see a substantial increase in its global share by 2040. At present, India's space sector contributes a modest $8 billion to the overall cake. However, the government has set its sights on an ambitious target, aiming for a five-fold surge in India's share of the global space economy.