Pvt. companies to manufacture arms
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Pvt. companies to manufacture arms

By agencies   |   Friday, 09 June 2006, 07:00 Hrs
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NEW DELHI:Defense Minister Pranab Mukherjee announced the Defense ministry’s proposal to permit select private companies to participate in advanced armament production.

Mukherjee said that the private companies would behold the right to receive defense technology from abroad. They would be treated equal to Defense Public Sector Undertakings to select the transfer of technologies from outside sources and assume the role of system integrators and producers of large weapon systems and weapons platforms.

The Defense Ministry had the proposal to open the defense sector to private participation since 2001 to trigger greater participation and amalgamation of investments and resources to reduce the strain on exchequer and defense spending.

However, with lucrative contracts worth billions of dollars coming up, offering to purchase futuristic fighters, heavy caliber artillery guns, ground to air missiles and Nuclear and Biological radiation proof clothing, the country’s defense industry has earned a fillip. An offset provision has been incorporated in defense purchases and private and public sector undertakings have been asked to capitalize on offsets, stated Mukherjee.

"Only Tata's and Larsen and Toubro have ventured into defense fields so far and their initiation into the field of defense technologies has been boon-full for them", said Mukherjee who has an appointed team odf selectors to choose the Tier I industries to be incorporated in the Raksha Udyog Ratnas list.

Mukherjee added that the attempt was to attract investments in new technologies rather than cater to market forces. He believes that the policy would open up new avenues for growth in industry participation, technology up-gradation and employment opportunities within the country. He also stated that a major part of India’s demand in the armed forces sector depended on imports.

Defense PSU’s and Ordnance factories have been able to cater to the requirements of the armed forces to a large extent. However, the Defense Minister felt that the PSU’s should take steps to tap the country’s rich resources to train manpower and adapt to the changing business environment.

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