Licence, approval must for private, FDI defence investment: Pranab

New Delhi, Aug 24 (UNI) Defence Minister Pranab Mukherjee today said in the Lok Sabha that though the defence production sector has been opened up for private as well as Foreign Direct Investment, they will have to seek specific licence and approval in all cases.

He said in the case of FDI, 26 per cent stake in any such approved project for defence production was being allowed.

In the case of domestic private players, so far only Larsen and Toubro and the Tatas had associated themselves with some of the defence-related development projects.

Responding to questions, Mr Mukerjee said the defence production figures supplied to the Members were related to just for three months from April to June and thereafter, there was some slowdown due to non-availability of some special grade of steel.

However, import orders had been placed and it was expected that in the remaining eight months time, the overall production figures and value of the arms production from ordnance factories would not be lower compared to the previous year.

He, however, maintained that primary aim of the ordnance factories was to meet the arms and ammunition requirements of the armed forces, para military forces and local police force and depending upon their order position, the arms were being produced.

He said as India was not a big exporter of arms and ammunition, the question of maintaining higher capacity utilisation did not arise. However, during war time, when demands were higher, the capacity utilisation at these factories was much higher as was the case during the Kargil war.

The Defence Minister refuted the charge that the arms and ammunition produced in 39 ordnance factories were below standard.

''Our products are as per specification and are equally good.'' UNI BKS PK DB1351