New Delhi, Sept 20 (UNI) An apex chamber body today said the government has accepted the industry's proposal of hiking foreign direct investment (FDI) in defence sector from 26 to 49 per cent "on case to case basis".
Speaking on defence procurement policy at Associated Chamber of Commerce (ASSOCHAM) here, Defence Minister A K Antony said his ministry is considering the proposal mooted by the body for raising the FDI's ceiling to 49 per cent.
But he clarified that enhancement of FDI beyond the existing 26 per cent limit will be considered on " a case to case basis" and would not be open to all proposals. The government, he added, is also considering industry's proposal to indigenise defence production through absorption of latest technologies.
Mr Antony said the offset policy by his ministry will also be reviewed to accelerate defence procurement. The policy, while retaining the earlier minimum 30 per cent offset requirements in defence imports of Rs 300 crore or more, has added a provision of offset banking, besides enlisting a number of categories of defence products.
''The offset policy which I understand is of considerable interest to Indian defence industry has been rationalised to meet their much needed demand to include offset credit banking which will enable foreign participants to create offset programmes in anticipation of future obligations,'' the Minister said.
But he assured that the policy and procedure will be further streamlined and simplified to enable domestic firms to participate in such offsets. The mandatory requirement of an industrial license has been relaxed so that all that companies now need to do is to meet the relevant guidelines specified by the government.
This, he said, will encourage foreign firms to enter into long term relationships with their Indian partners, leading to benefits to both the parties.
Assocham president Sajjan Jindal, while thanking the Minister for considering their FDI proposal which he argued will help in increasing defence indigenisation and in ensuring technology transfer to Indian defence industry, however, wanted its opening for all companies.
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