New Delhi:
With the cap in Foreign Direct Investment (FDI) in defence remaining at 26 per cent and proposals beyond that which bring state-of-the-art technology to be considered by the Cabinet Committee on Security (CCS) on a case-to-case basis, senior Congress leader and Defence Minister AK Antony has succeeded in prevailing over the Commerce Ministry.
Mr Antony had written to Commerce Minister Anand Sharma earlier this month opposing any raise in the cap in defence to 49 per cent, saying that the "retrograde" move will "stymie the growth of the domestic industry while increasing the dependence on foreign manufacturers".
In his letter, Mr Antony had said the FDI cap should not be raised as the country "cannot afford to be dependent on foreign companies and vulnerable to the policies of their countries of origin" in defence matters on a long-term basis.
After the AgustaWestland chopper scam, the Defence Ministry has been stressing on the development of indigenous weapon systems for meeting the military requirements. It changed its procurement policy in favour of the local industries, thereby making imports the last option.
The ministry argued that the indigenisation of military hardware is the best way to avoid controversies such as the chopper scam, and asked the armed forces to change their mindset of relying on imports to meet operational requirements.
The ministry is also planning to invest Rs 15,000 crore in the Ordnance Factory Board and the Public Sector Undertakings (PSUs) under it in the next five years.