India to facilitate greater private participation in defence production

New Delhi, Feb 12 : To facilitate greater private sector participation in the area of defence goods production, there is a proposal in the procurement policy for 2008 to fine tune the offset policy, said Secretary of Defence Production Pradeep Kumar in the capital today.

India's offset policy for defence goods has been designed to leverage the country's position as a large buyer and exporter, and it states that any purchase from a foreign supplier in excess of 70.0 million dollars, will require a reinvestment of 30 percent of the total purchase amount in terms of components and services from India.

The offset policy applies to imports by defence PSUs, ordinance factories and private participants of the industry.

The defence industry in the past has been dominated by government-run public sector undertakings (PSU), but in 2001, the country opened for up to 100 percent Indian private sector investments in the defence industry and allowed foreign direct investment (FDI) of up to 26 percent in select areas, Kumar said.

He said the Defence Offset Facilitation Agency (DOFA) has been established under the Department of Defence Production (DDP) as a single window agency to facilitate the implementation of the offset policy of the Ministry of Defence.

Announcing that the fifth Defence Expo will be held from February 16-19, Kumar said that it depends on the Indian defence industry to absorb the offset and the export potential generated.

He further said that foreign partners are free to choose whether to tie up with PSUs or private sector to participate in defence production.

The Defence Expo will showcase, as in the past, India's emergence as an attractive market as well as investment destination for joint venture in defence industry, he said.

Kumar said that most important objective of the Defence Expo is to promote Indian products in the international market and facilitate business and discussion between foreign and indigenous companies.

He informed that six Defence Ministers along with delegates of 47 countries will take part in the expo, and added that for the first time both telecom and IT companies will be showcasing their products and services in the Defence Expo.

Thirty countries are participating in the Defence Expo and 91 new products will be launched by companies participating in the expo, Kumar said.

Talking about the response of the private sector to the Defence Expo, Kumar said that this year 202 Indian companies would showcase their products along with 273 foreign companies.

ANI