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India opens defence sector to FDI
By siliconindia
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Thursday, 14 September 2006, 19:30 IST
NEW DELHI: Defence Minister Pranab Mukherjee on Wednesday announced IndiaÂ’s opening up of the defence industries and defence research and development to Foreign Direct Investments (FDI) through the policy of offsets.
Expressing New DelhiÂ’s desires of opening avenues of high-technology trade with United States, the Defence Minister said "the new offsets policy provided for direct foreign investments in India by major armament companies in the defence industry as well as defence research."
Speaking at the third Indo-US economic summit, he stated, "A roadmap for indirect offsets is also under our considerations," while adding that a defence offset facilitation agency had been set up as a single window agency for the implementation of the policy.
"With these new and transparent policies in place, my hope is that you'll find the defence sector an attractive arena to collaborate and invest in," Mukherjee said in significant remarks. The revelation comes with the defence ministry on the threshold of opening multi-billion dollars tenders for purchase of weapons platform and systems.
Referring to the Indo-US civil nuclear agreement, Mukherjee said India was keen on its early clearance so that "invisible barriers to trade and investment on the part of both Indian and American businessmen were removed".
Amidst fears of the current US Congress not passing the nuke deal, Mukherjee stated that the its passage would benefit the business communities in both the countries.
He said that IndiaÂ’s inability in accessing alternate sources of fuel could become an impediment to economic growth. Emphasizing on the country's dependence on imported oil and gas to meet its energy needs, Mukherjee added, "Our energy consumption levels are going to increase significantly...our growth levels could flag if we don't have access to more than one source of energy."
Drawing attention to both countriesÂ’ attempts towards doubling bilateral trade in the next three years, he said, "Current bilateral trade between the two countries is one tenth of the trade between US and China. There is no reason why levels of trade between our two countries shouldnÂ’t rise to, and even surpass, those levels."