Bid to attract Indian, foreign firms to invest in defence sector

NEW DELHI: To attract Indian and foreign manufacturers to invest in the defence sector, the government has said there were immense opportunities for them under its massive military modernisation programme.

The government has cited "country's extensive modernisation plans, an increased focus on homeland security and India's growing attractiveness as a defence sourcing hub, besides high government allocation for defence expenditure" as the reasons to invest on the Make in India programme.

The government said India's 60 per cent current needs in defence are catered by imports and opening of the strategic defence sector for private sector participation will help foreign original equipment manufacturers to enter into strategic partnerships with Indian companies and also aim at global business.

"Besides helping build domestic capabilities, this will bolster exports in the long term...there is government policy of promoting self-reliance, indigenisation, technology upgradation and achieving economies of scale and developing capabilities for exports in the defence sector," it said.

Attracting domestic investors, government has said there are opportunities worth over Rs 2.5 lakh crore in defence offsets in the next few years.

The government also listed its decision to increase FDI limit in defence sector from 26 to 49 per cent along with delicensing of defence industrial manufacturing as the reasons for the investors to start manufacturing in the country.

It said there are opportunities for manufacturers to invest money in "defence products manufacturing, supply chain sourcing opportunity and defence offsets."