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PC: India Today

49% FDI cap for private ‘strategic partners’ under ‘Make in India‘ in five areas of defense

Ministry of Defense appointed committee has to identify private sector players that will be accorded as special ‘strategic partner’ for major military manufacturing projects. The defense panel has identified five priority areas of defense sector under the Make in India initiative, and has recommended a strict three step procedure to follow before selection. Probably, selecting the private players will be done on the basis of technical and financial evaluation.

According to V K Atre, chief of the defense panel (former DRDO Chief), ten segments of projects have been identified – one private player will be chosen for each segment but for now only five should be prioritized. The chosen areas include helicopters, submarines, armored fighting vehicles and ammunition.

The strategic partnership can be a minimum lock in period of 20 years and one private company shouldn’t be allowed in another strategic areas. For example, Company A shouldn’t be allowed for building submarines and tanks at the same time. The government will also have power to overtake the company in the case of war or emergencies or non-performance.

However, new private players fear the suggestions are discriminatory in nature because they don’t stand a chance in front of companies like L&T and Tata.

Source: ET

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