Is FDI in Defence the best option?

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FDI in defence
In a country which imports up to 70 per cent of its military hardware, the Defence industry is still struggling to achieve self-sufficiency. India is dependent to a large extent on foreign sources for meeting its Defence requirements. There is also a lack of technology in our Defence production and only FDI can ensure quality weapons for our soldiers. However, critics argue that this will make India more dependent on foreign countries for its Defence and research needs and will eventually wipe out our Defence industry.

But their are different opinions and ideologies as far allowing 100 per cent FDI in Defence is concerned. The Government have started the initial task of hiking the Foreign Direct Investment in Defence to 49% from 26 % initially but raising it further to 100 % would bring into debate on India's battling Defence sector.

"We are importing 70 per cent equipment from foreign sources. The question is that those who oppose the idea of 49 per cent FDI in defence sector, you can buy 100 per cent equipment from foreign sources but oppose our own...I think the 49 per cent (FDI limit) approach in is larger national interest," said Finance Minister Arun Jaitley after he presented the Union Budget 2014.

Will 100% FDI compromise national security

With proposal of 100% FDI in Defence coming into light, the questions are also being raised whether such move will compromise the security of the nation. If India is importing 70 per cent of its military equipment, the Defence ministry has to ensure that these technology transfers are secure as sharing of information with a foreign nation which is not aligned towards India can prove dangerous. In order to maintain security, the appropriate agencies will have to monitor their production once their production unit is set up in India.

Former Defence Minister AK Antony had severely criticized the Narendra Modi Government's move of raising FDI and cited that it will harm the national security of the nation.

"The proposal to increase FDI from 26 per cent to 49 per cent in Defence production will harm our national security. Hitherto, India was following an independent foreign policy and strategic independence and we scrupulously avoided joining any of the military blocks even though we are friendly with almost all the important countries. We have always taken special care to see that we are not aligning with any military block," Antony had said after the Union Budget was presented in the Parliament.

The critics have also said that the increase in FDI limit would allow foreign powers to interfere in Indian joint venture partnership programmes.

FDI in Defence best option in current scenario

The opinion on allowing FDI in Defence is varying from person to person, from one ideology to another but seeing the current Defence scenario, FDI is best option available. With weak Defence observed in the last decade and escalating tensions with neighbouring countries like Pakistan and China a strong Defence production can play a pivotal role in our foreign policy.

Only FDI can ensure quality weapons for our soldiers

Today our jawans are sacrificing their lives at LoC(Line of Control) with continuous ceasefire violations and we have only become a mute spectators to Chinas aggression and Pakistan's belligerent behaviour. Due to lack of technology in our Defence production, India has always depicted itself as a weak territory. The opinions may vary but FDI may not immediately help in making a deterrent nation but in the current scenario it is the best option. It will also upgrade India's military prowess in little time and with less money.

Critics point of view, scope of corruption

The fact that India needs an iron hand and not weak Defence and it can be ensured only by indigenous Defence production through FDI route. But the critics argue that allowing FDI upto 49 per cent or even 100 per cent can be detrimental to indigenous Defence production by public sector units and would compromise national security. Sharing of the information such as source design and code with the countries which are not friendly with India can prove detrimental.

Also list of corruption scams involving Defence sector like 3600 crores AugustaWestland VVIP chopper deal, Bofors scandal, submarine deals from HDW etc are also a concern. If Government is allowing such a large proportion of per cent in Defence than how far they will be successful in ensuring that their is no graft?

If we go by the critics, the FDI in Defence is debatable but are we really capable of indigenous production? Though FDI in Defence is also likely to create 2 million jobs but putting at stake country security at the cost of jobs is also not advisable.

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