(Image source from: ndtv.com)
Following quite the disruption of the normal operations because of the pandemic, India is now ready to ease the restrictions on the level of foreign ownership in the sectors of defence manufacturing. The same was reported by Finance Minister of India, Nirmala Sitharaman on Saturday.
Under this specific plan, the foreign investors will have up to 74% ownership in any form of defense manufacturing sector that they invest on. The same limit was just 49% previously.
The reports suggest that the elevated foreign investments would help reduce the “huge defence import bill” and help Indian become more self reliant or “Atmanirbhar” in terms of the defence goods manufacturing.
Sitharaman further added that India will also be making a list of the weapons that could not be imported before.
Atul Pandey, a partner at India law firm Khaitan & Co further addressing this said that it would help the foreign defence manufacturers to retain their control on the joint ventures that they sign up for.
Pandey further said that majority of the leading defence manufacturers like Lockheed Martin Corp., Boeing, MBDA, Raytheon and Dassault, could end up making more investment following the ease of restrictions.
The government, which is experiencing a sudden hit to the revenue generation amidst the coronavirus pandemic have been advised by the policy makers to cut out on their spending, including the import of the defence items.
In the annual budget of 2020-21, the FM of India had allocated 4.71 trillion rupees ($62.1 billion) for the defence sector for annual spending.
India was categorised as the top defence importer between the years of 2013-2017, which accounted for 12% of the world’s defence imports from by Russia, Israel and United States being the biggest suppliers.
PM Narendra Modi had also set up a target in the initial days of the year suggest that they would double the defence exports in the next five years, from $2.4 billion.
By Somapika Dutta