Anand Sharma says will consult all ministries before hiking FDI cap

PORT LOUIS: With Defence Minister A K Antony sharply opposing raising the FDI cap in the sector to 49 per cent, Commerce and Industry Minister Anand Sharma today said the government will take into account views of all ministries before any liberalisation.

"This is a dialogue within the government. There is a view point which is in favour, Finance Minister and me and many of our colleagues have been in favour. But defence is a sensitive sector. Our aim is for a calibrated approach," he told reporters here.

Sharma said nobody was opposed to induction of new technologies of manufacturing systems in the country and a consensus would happen when it is discussed.

"Defence we are not taking up unless and until the meetings are convened," Sharma said.

Antony in a letter to Sharma has opposed the Industry Ministry's proposal to hike Foreign Direct Investment (FDI) cap in the sector to 49 per cent from the existing 26 per cent.

"Allowing foreign companies to set up manufacturing/ assembly facilities here would be a retrograde step as it will stymie the growth of indigenous design and development, and our dependence on foreign countries and OEMs for modern weapons will get perpetuated," Antony wrote in the letter.

The Commerce Ministry has been pushing for hiking the FDI cap in defence sector from 26 per cent. It had earlier proposed hiking it to 74 per cent but apparently due to Defence Ministry's tough stand on the issue, it has now proposed it to be 49 per cent.

India had pitched yesterday for liberalised visa regime among IOR members and said it is considering visa on arrival facility for citizens from Mauritius and many other countries in the region to boost cooperation and trade.

On global economy, the statement said: "We express concern at the weak global economic environment and observe that the low rates of growth in advanced economies have impacted developing economies through slower international trade and decreased FDI inflows."

It said member states should consider and adopt measures, consistent with their WTO obligations to stimulate growth and development in the Indian Ocean region.

Expressing satisfaction with the discussions during the conference, it said the proposals and ideas raised and agreed to in the four sessions can be taken forward by member states.

"We propose that initiatives taken at this conference should facilitate interaction between trade and investment promotion bodies of Member States," the communique added.

It said the Indian Ocean is a binding force of the Association and therefore it is imperative that members identify areas of cooperation in harnessing the oceanic resources which could become a pillar to sustain our development efforts.