ET GBS: Defence sector is like a Doberman, have to unleash it carefully, says Manohar Parrikar

NEW DELHI: Detailing the government’s efforts to promote defence manufacturing in India, Manohar Parrikar has said that the potential of the sector needs to be unleashed carefully and has shared that special provisions are being put in place to promote skill development.

“The defence sector is like a Doberman, when you unleash it, you have to be careful that it does not bite anyone. In defence exports, we have almost removed all restrictions and in 2016 there will be even easier ways of exporting even higher level material,” the defence minister said at the ET Global Business Summit in the capital.

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Parrikar, who was speaking on a panel on Make in India, said that his ministry is also improving the framework for defence purchases and has eased FDI regulations to promote tie ups. “The 49 percent FDI (increase in cap) was absolutely essential. On a case to case basis we can consider even more. The process for that has been reduced to the ministerial level instead of the cabinet level which was much more difficult,” Parrikar said.

The minister announced at the summit that the government will now add skill development to the offset policy that mandates foreign companies to invest at least 30 percent of the value of the contract value in India.

“We have been pushing to have skill development as art of offsets. Of course it will not give anyone the freedom for manipulation and with proper guidelines can be included as part of offsets,” Parrikar said.

The minister also called for lesser governance in the manufacturing sector and expressed his reservation on increasing regulation. “I believe that the less the government is in any manufacturing sector, the faster it will progress. In India we have a tendency that is something wrong happens, we try to curb the wrong by having more regulation rather than punishing the person who is misusing or violating,” the minister said.

Making a case for freeing up regulation, Parrikar said that instead, a mechanism has to be in place to punish `quickly and efficiently’ those who violate rules.