India’s newly appointed Defense Minister Arun Jaitley has inherited the task of deciding whether or not to raise the foreign direct investment (FDI) level in the defence sector from 26 per cent to 49 per cent.
Jaitley, who is also the Finance Minister, would find it easier to address the FDI issue which is not merely a MoD matter but one which concerns the finance and industries ministries as well.
Several foreign companies who wish to partner with Indian companies have held their hand due to the cap on equity holding which would render them a minor player in the partnership. Several partnerships have collapsed due to the restrictions, most notable is the joint venture between Mahindra and Mahindra and BAE System.
The FDI issue is also bogging down the implementation of offsets in India as it is preventing foreign partners from bringing in sufficient capital to kick start their JVs with Indian entities.
Boeing also echoed similar sentiments in February when Lt Gen Jeff Kohler, Boeing's vice president of international business development in defence, Space & Security, said at the Singapore Airshow that, “India will see 49 per cent more investment from US companies.”
Kohler made the comments on aviation industry-wide speculation about the government increasing FDI in defence sector to 49 per cent from the current 26 per cent, with some expecting an announcement in the near future. "It has been very difficult to go to our senior corporate leadership and justify an investment in India at 26 per cent FDI," said Kholer.
In May, the Federation of Indian Chambers of Commerce and Industry (FICCI) released a statement saying it would be “strongly advocating policy regimes that facilitate building a strong Defence Industry in India. Towards this FICCI supports defence industry's apprehensions on the serious implications of Consolidated FDI Policy Circular of 2014 (effective from April 17, 2014) issued by Department of Industrial Policy and Promotion on the continuance of Indian conglomerates, both Public as well as Private, in the defence business.”
“With MoD now getting committed to indigenising the sector, the DIPP circular freezing FII holding as on 22nd Aug 2013 in Defence License companies’ heralds roadblocks in the process the government has embarked in the recent past,” the statement added. “FICCI has argued that a blanket ban on Investment by Foreign Portfolio Investors FDIs/FIIs in listed Indian conglomerates, where defence business is just one of the business verticals will not be a practical view in the current corporate as well as regulatory structure.”
Northrop Grumman has announced that its U.K
AgustaWestland today announced that the Court of Milan partially upheld the complaint lodged by the Indian Ministry of Defence, and thereby revoked the order issued by the judge on last March 17. The order pertains to the seeking of emergency interim lodged by AgustaWestland to resist the calling of certain first demand bank guarantees provided with reference to the contract for the supply of 12 helicopters AW 101 VVIP/VIP for an amount of EUR 228 million maximum against a call seeking to cash EUR 278 million
Boeing has delivered the fourth P-8I maritime patrol aircraft to India on schedule, fulfilling the first half of a contract for eight aircraft. The aircraft departed from Boeing Field in Seattle and arrived May 21 at Naval Air Station Rajali, where it joined three P-8Is currently undergoing operational evaluation, according to an official statement
The Indian Air Forces Su-30MKIs and the French Rafale fighters will come together for a ten-day air exercise called the 'Garuda-5', aimed at training the pilots and crew of Indian and French fighters in air superiority operation in Rajasthan's Jodhpur airbase from June 3. The French composition for the Garuda- 5 will include four Rafale multi-role fighter aircraft and one air-refueler aircraft with more than 100 personnel
With Indias Central Bureau of Investigation (CBI) yet to prove the existence of any money trail in the VVIP helicopter bribery scandal and AgustaWestland not blacklisted yet, the possibility of the Anglo-Italian manufacturer making a comeback in India looks likely. A year after the CBI began its investigation the agency has not been able to establish a money trial and is no longer expected to file charges, according to reports
Russia is ready to continue deliveries for the Indian naval aviation, if it receives a request from the Indian side, the head of Russia Helicopters said on Tuesday. “As for the Vikramaditya aircraft carrier, this will undoubtedly be a decision by the Indian side
India may allow 100 per cent foreign direct investment in defence to help increase domestic manufacturing. The department of industrial policy & promotion (DIPP) has prepared a draft Cabinet note that proposes the plan
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