Air Force Takes off With Plans to Make Aero India Bigger

BANGALORE: The Indian Air Force (IAF) has begun the preliminary rounds of preparations for the 10th edition of the biennial air show to be held at the Air Force Station (AFS) Yelahanka, in Bangalore, from February 18 to 22, 2015.

With Prime Minister Narendra Modi’s ‘Make in India’ pitch the Aero India-2015 will be seen through ‘a new window of opportunity’ by the aerospace and defence industry now. The IAF officials said they are preparing the ground to accommodate more participants during the air show. Speaking to Express on the sidelines of a media visit to AFS Yelahanka on Wednesday, ahead of the 82nd IAF Day celebrations on October 8, Air Commodore S C Gulati, Air Officer Commanding of the station said initial talks with various state government agencies have already begun. “These are early days of preparations and we have the SOPs (standard operating procedures) in place. We hope that the coming show will be bigger in all aspects and AFS Yelahanka is warming up for the task,” said Gulati, a seasoned IAF pilot with close to 8,000 hours of flying. Survey of hospitals and helipads in Bangalore are underway as part of the disaster management plan. To a query whether the training activities at AFS Yelahanka would be hit if HAL Airport is reopened for commercial operations, Gulati said the IAF’s modern traffic management systems were capable of handling the situation. To another query whether the current activities at the Kempegowda International Airport (KIA) have eaten into the traffic space of the base (as reported by the media earlier), he said the training schedules have not been affected. “Our training patterns have not changed and are proceeding as planned. We operate on the assigned air space and both the HAL and KIA too do the same. Paris has got three airports and London has four,” said Gulati, who was part of the Air HQ Communication Squadron, flying the Boeing Business Jets, carrying VIPs. The AFS Yelahanka has the record of being the single largest base in India with maximum number of flying hours. It has to its credit over 20,000 hours of flying, annually. As part of the IAF’s ongoing modernisation mission, AFS Yelahanka will soon get a new station HQ with the construction work almost entering the last lap. An official said the induction of AFS Yelahanka is poised to increase in the near future. SOurce : Defence News

Modi’s US visit : Defense partnership and Economic relations to remain top agenda

Defence and security partnership, energy including renewable energy relations and economic and investment ties and technology transfer will dominate Narendra Modi’s maiden visit to the USA as Prime Minister that is widely expected to correct sentiments in the India-US relations that have been soured since 2011.

On his longest trip abroad since taking over as the PM, Modi leaves for USA on September 25-26 for nearly seven days during which he will give his maiden speech at UN General Assembly on September 27 in New York and then proceed to Washington for the summit meeting with President Barack Obama on September 30. All eyes are set on that meeting when Modi is also expected to raise concerns over US Immigration Bill that will affect Indian IT industry if passed in the current form. The Border Security, Economic Opportunity, and Immigration Modernization Act (S 744) imposes new and onerous restrictions and higher fees on H-1B and L1 visa programmes on the international IT services sector and would create an uneven playing field. Modi’s visit is also expected to iron out bilateral differences over Intellectual Property Rights particularly in the pharmaceutical industry, official sources told ET. Big ticket items for the visit include expansion in the defence partnership to not only launch joint production of equipment but also sharing perspectives on West Asia and East and Southeast Asia, sources indicated. Joint production and co-development that entails technology transfer is Modi’s mantra to attain self-sufficiency in the defence sector in the long run. India has deep interests over energy security and its diaspora in West Asia where Arab Spring followed by radical ISIS movement has been destablising factors. Meanwhile, China’s growing ambitions in East and Southeast Asia have been a matter of concern for both India and USA. Among regional issues, situation in the Af-Pak region will dominate discussions, sources pointed out. India’s energy demands are rising by the day and Modi will make efforts to source more energy from Washington including partnership in solar energy and importing LNG and shale gas. There willfolbe considerable focus on clean energy partnership, an official said. While Modi would seek transfer of high-technology from the USA, the Obama administration would be keen to hear from him an environment conducive for investments after the policy paralysis in India since 2011, sources indicated. US is interested in the agriculture and food processing sectors including coldchains. Besides, interest is growing in USA about investments in industrial parks or zones, and water purification, water management and energy from waste as part of smart city projects in India. “The US administration and senators are looking forward to a visit that will energise the relationship and expect that Prime Minister Modi could give them a confidence to further expand and deepen ties,” averred Robinder Sachdev, head of the India chapter of US India Political Action Committee, one of the influential India-American lobby groups said. There are also indications US firm can invest in the Modi government’s campaign to Clean India. Education, especially community colleges by USA in India could be one of the deliverables from the visit. Modi and Obama will also discuss India’s nuclear liability law and ways to address concerns of US nuclear major Westinghouse. Source : Defence NEws

France asks India to finalise joint missile project soon

NEW DELHI: France has asked India for early finalisation of the long-pending Rs 30,000-crore project for joint production of short-range surface-to-air missile (SR-SAM) systems.

In a letter, the French Defence Ministry has told its Indian counterpart that “it will carry out substantial transfer of technology and know-how, especially in the field of missile guidance”. The French side has proposed that the project “would enable India to get in a few years in areas of strategic missile, the maximum autonomy you have called for”. SR-SAM is proposed to be a joint venture between India and France and they have nominated the DRDO (Defence Research and Development Organisation) and a French multinational firm for the programme. The deal has been under negotiations for over five years and has been awaiting final clearance after French President Francois Hollande and then Prime Minister Manmohan Singh in 2013 announced that talks have been concluded between both the sides on the missile development project. The IAF had raised certain objections over the programme but the Defence Ministry has to take a final call on the programme after holding discussions with all stakeholders. The French Defence Ministry said it wants to actively participate in new Indian government’s plans to achieve autonomy in field of military hardware production. It has said that the missile programme would help in meeting India’s domestic market and can also be supplied to future export markets. Source  : Defence News

First set of defence sector FDI proposals gets FIPB nod

NEW DELHI, SEPT 16:  

The Foreign Investment Promotion Board (FIPB) has given its nod to the first set of defence proposals. The Government had notified new norms allowing higher FDI in the defence sector on August 26.

A senior Finance Ministry official said that the board, at its meeting on Tuesday, cleared 21 of the 35 proposals brought for its consideration. The approved proposals are worth ₹988 crore.

The 21 approved projects include those of Bharti Shipyard, Solar Industries and Kineco Kaman Composites India relating to the defence sector. Though another proposal, of Hatsoff Helicopter Training, came through the Civil Aviation Ministry, it involves the Defence Ministry.

The board also gave its nod to two proposals, of IndusInd Bank and ANZ Capital, related to the financial sector.

However, Sistema Shyam Teleservices’ proposal was rejected. “There were problems in the way the proposal was structured, and also security concerns,” the official said.

(This article was published on September 16, 2014)

Source : Hindu Business Line

STATOISTICS

China started its economic reforms in the late 1970s. In 1980, China’s GDP–both in absolute and per capita terms in PPP dollars–was smaller than India. In 1984, the Chinese economy overtook us in terms of absolute value of output.
Interestingly, until 1991, the year when India started its economic reforms, India’s GDP per capita was higher than China’s. Since then, the gap between the two economies has only widened. Some experts believe that the economic reforms did not work that well in India because before opening its economy China managed to bring some level of social equality by doing land reforms and ensuring access to education to all section of society. Also its economy is growing at a faster rate while the population growth has stabilized




Source : TOI

India is an emerging Democratic Superpower : Australian PM

MUMBAI: Describing India as an “emerging democratic superpower”, Australian Prime Minister Tony Abbott today said he looks forward to making the most of the abundant opportunities for business in the country.
Kicking off his two-day India visit from the commercial capital, Abbott said Prime Minister Narendra Modi’s call “come, make in India” was “close in spirit and in intent” to the phrase he had used in respect of Australia that “we are open for business”.
“This is a country which has amazed the world over the last few decades with its growth and its development – the world’s second most populous country; on purchasing power terms, the world’s third largest economy, clearly, the emerging democratic superpower of the world and a country with which Australia has long and warm ties.
“The purpose of this trip, as far as I am concerned, is to acknowledge the importance of India in the wider world, acknowledge the importance of India to Australia’s future, to let the government and the people of India know what Australia has to offer India and the wider world for our part, and to build on those stronger foundations,” he said addressing a 30-member business delegation accompanying him on the trip at Hotel Taj Palace.
Noting how India has changed “enormously” since his last visit 33 years ago as a backpacker, Abbott, who has expressed keenness to sign a nuclear deal with the country, said, “I can remember on my first day in Mumbai watching a bullock cart take material to a nuclear power station.
“Well, 33 years on, there aren’t that many bullock carts left in urban India, and the power stations – the nuclear power stations – are more sophisticated than ever,” he said.

Abbott, who had visited Taj Hotel, India’s icon of hospitality, during his 3-month trip in 1981, and had lunch there, described it as one of the truly magnificent hotels in the world.
“Back in 1981 I spent three months as a backpacker roaming around India – this mysterious, fascinating, enthralling sub-continent, this world in one country – and I spent a lot of time in third-class compartments of railway carriages, I’d spent a lot of time in two rupee a night hotels and I thought, I’m going to have to treat myself.
“So, I came here to the Taj Hotel and I had the best lunch this hotel could provide and I’m sure that the breakfast we’re about to enjoy will be no less splendid than the lunch I had here 33 years ago,” he told the delegates, fondly reminiscing about his visit.
Abbott said though there is no dearth of opportunities elsewhere in the vicinity of Australia, there is “an abundance of opportunities” in India.
“I am determined to make the most of them, I know all of you are determined to make the most of them and I look forward to working very closely with you and with our Indian interlocutors over the next two days,” he told the delegation.

Source : Defence News

US endorses India-Japan strategic partnership

WASHINGTON: The US has welcomed the just announced India-Japan Strategic Partnership and said it is looking forward to strengthen its trilateral co-operation with them.

“The US strongly supports India’s collaboration and cooperation with its neighbours in the Asia Pacific. We actively support such collaboration through our trilateral dialogue and other activities with India and Japan, and look forward to strengthening further our trilateral cooperation,” State Department spokesperson Jen Psaki said.  The US strongly supports a prosperous India playing an important role on the global stage, she said. It is during the Obama Administration that India, Japan and the US have started trilateral meetings.  “As we have long said, a strong, prosperous India contributes to regional and global peace and prosperity,” Psaki said responding to questions about Prime Minister Narendra Modi’s visit to Japan this week. During a meeting between Modi and his Japanese counterpart Shinzo Abe, the two sides announced India-Japan strategic partnership and deepening of defence relationship.  The Pentagon welcomed the decision of India and Japan and said that the latter’s participation in the Malabar exercise would be routine. “We are very excited that Japan’s participation in Exercise Malabar is becoming routine and believe that credible, ready, and inter-operable maritime forces help to preserve peace, prevent conflict, and foster a spirit of cooperation to meet regional and global challenges for mutual benefit,” Jeffrey S Pool, a Defence Department spokesperson said.  American think-tank community has described Modi’s Japan visit a great success. “Modi’s visit to Japan has been lauded by all corners as a great success,” said Alyssa Ayres, Senior Fellow for India, Pakistan, and South Asia at the Council on Foreign Relations, a top American think-tank.  “The United States has strongly supported strengthened ties between India and Japan (the US-India-Japan trilateral just one example), and the deliverables announced in the Tokyo Declaration complement components of US-India relations,” Ayres said. The joint emphasis on democracy, upgraded defence relations, science and technology, and a robust catalogue of economic undertakings all illustrate similarity with priorities in the US-India relationship, she said.  One major difference lies in the Japanese government’s ability to mobilise large amounts of Overseas Development Assistance, particularly through soft loans, she added. “The Tokyo Declaration puts Prime Minister Abe’s commitment at 3.5 trillion yen over five years (around USD USD 33 billion). That’s a much larger sum than the United States government typically mobilises, and at a time when the US Congress has not renewed the US ExIm Bank’s charter, shows where Washington has a diminished ability to support similar projects,” Ayres said. “Countries like Japan are working with economic policy tools to meet the strategic interests of partners like India, especially on infrastructure. Some good lessons for us here,” she said. Writing for “Asia Unbound” a CFR foreign policy blog, Sheila A Smith wrote that in his five-day visit this week, Narendra Modi has made Japan’s pivot to India even more enticing – and far more likely to succeed.  Modi’s election in May has brought more energy to the relationship, she noted. “As the television footage suggested, the two leaders seem to have a good chemistry, and enjoyed their time together. Modi even sent out messages of thanks to Abe via social media as he visited Kyoto and other spots in Japan,” Smith said.  Abe, according to her, must be satisfied to see one of his main diplomatic efforts take root. He has put considerable energy into developing new partners and opportunities for balancing China’s rise, and India has long been an option that Tokyo’s strategic thinkers have looked to develop, she observed. Source: Defense News

Government plans to export BrahMos missiles, Tejas, air defence system to Vietnam, Indonesia and Venezuela

NEW DELHI: The Modi government is quietly working on a plan to export defence equipment and armaments produced in India to friendly countries. A beginning could be made by exporting BrahMos missiles to Southeast Asia and South American countries. Vietnam, Indonesia and Venezuela have expressed willingness to procure the supersonic missile jointly produced by India and Russia, sources indicated to ET.
Indo-Vietnam defence ties are on an upward trajectory and Hanoi has been keen for the last few years to purchase this missile. However, there was no progress under the UPA government on the issue, sources indicated. BrahMos missiles have been inducted in all three defence services. The inter-governmental agreement between India and Russia for development of BrahMos missile (290-kmrange) also stipulates use of this advanced system to be inducted into the Indian and Russian armed forces as well  as export to friendly countries.



Vietnam and Russia are partners since the days of the Cold War and it can use Russian made defence equipment. India will sign an agreement for supplying defence equipment to Vietnam, during President Pranab Mukherjee’s trip from September 14-17. India and Indonesia also share good defence ties that encompasses training and defence exercises.
Recently, Prime Minister narendra Modi had stated that India should move towards self-reliance in producing military weapons and systems and also  look for exporting them to friendly nations.
The idea for defence co-development and joint production is not only to obtain cutting-edge technology and self-sufficiency in the long run but also export jointly developed products. So far, India depends on imports for meeting over 65% of its weapons requirement and has been branded as largest importer of arms by international think tanks. India could also export indigenously developed ‘Tejas’ – Light Combat Aircraft, ‘Akash’ – air defence system and ‘Prahar’ class of missiles to friendly countries. Tejas is a lightweight, multi-role, single-engine tactical fighter aircraft.
Akash, a surface-to-air missile, has a range of 25 km. Prahar is a 150 km-range tactical missile system. Several countries have shown interest in the Akash missile system, which was ready to be inducted into the Army. LCA is likely to be ready for induction into IAF by the end of this year after attaining the final operational clearance. Sources also claim that Indian weapon systems are cheaper than Chinese systems.

formal defence exports policy, it had earlier exported rifles to Nepal and Oman, besides supplying defence equipment to Myanmar including tanks, radars to Sri Lanka, defence equipment to Maldives, maritime patrol boats to Mauritius and defence spare parts to Vietnam. India’s current norm for defence exports involve supplies not only to friendly countries but also to countries which do not have civil war. “We do not want a situation where arms supplied by us is used by one group against another within the boundary of one country. 

Source : ET

India, Japan agree to strengthen defense ties

In his first state visit, Indian Prime Minister Narendra Modi has met with a kindred spirit, Japanese Premier Shinzo Abe. The two leaders, wary of China's glowing clout in Asia, have agreed to strengthen defense ties.

semco tech services

During his visit to Japan on Monday, Indian Prime Minister Modi warned Asian powers against territorial expansionism, in a veiled reference to China's ambitions in the region.

"The 18th century situation of expansionism is now visible," Modi said, after holding talks with Japanese Prime Minister Shinzo Abe in the historic city of Kyoto. "Such expansionism would never benefit humanity in the 21st century."

Modi didn't specifically mention Beijing, but China and India contest several regions along their common border. Abe shares Modi's suspicion of China's intentions in the region. Beijing and Tokyo dispute the Senkaku Islands, called the Diaoyu in Chinese.

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Modi's Japan visit signals strengthening of bilateral ties

Indian PM Narendra Modi will be heading to Japan on his first bilateral visit outside South Asia. Topping his agenda is the modernization of India's infrastructure and military, analyst Rajiv Biswas tells DW. (27.08.2014)

Over the summer, Prime Minister Abe's Cabinet approved a reinterpretation of Japan's pacifist constitution, permitting Tokyo to defend allies and deploy troops abroad for combat missions.

'Strategic, global partnership'

Although Abe and Modi failed to set up a permanent forum for their foreign and defense ministers to hold regular consultations, they did agree to "upgrade and strengthen" their defense ties. Tokyo is keen to sell New Delhi US-2 amphibian aircraft. The two countries also agreed to participate in joint maritime drills, and for Japan to continue participating in US-India drills.

"Together, working hand-in-hand with Prime Minister Modi, I intend to fundamentally strengthen our relationship in every field to elevate our relationship to a special strategic and global partnership," Prime Minister Abe said.

The two leaders also agreed to double Japan's investment in India over the course of five years to a total of 3.5 trillion yen ($33.6 billion, 25.5 billion euros).

slk/kms (AFP, dpa, Reuters)

Source : http://www.dw.de/ 

For First Time Since World War 2, Japan Will Sell Military Equipment. To India

TOKYO:  During his visit to Japan, Prime Minister Narendra Modi may not have closed a deal on nuclear energy cooperation, but he is returning with a pledge from counterpart Shinzo Abe for nearly 34 billion dollars in investment over the next five years, and the  sale of an amphibious aircraft to India's navy. The deal marks the intent of Asia's second and third largest economies to counter an increasingly aggressive China. 

The specialised sea-plane, the US-2, will be Japan's first overseas military sale in nearly 50 years. Because it provides landings on sea and land, the plane will significantly enhance the Indian Navy's ability to carry out, casualty evacuations, deliver humanitarian assistance and conduct long-range surveillance and reconnaissance.

In keeping with Mr Modi's emphasis on developing military technology indigenously to check India's dependence on foreign defence manufacturers, the US-2 planes will be made in India. The Indian Navy has been lobbying to get 15 of these.

A statement issued in Tokyo after Monday's summit between Prime Ministers Modi and Abe said "both sides directed the Joint Working Group to accelerate progress in the discussions and preparations for a road map for the development of the Indian aircraft industry through US-2 amphibian aircraft cooperation including the transfer of the aircraft and its technology to India." 

This is the first time since World War-II ended seven decades ago that Japan will be selling military hardware abroad. Following its defeat, Japan had imposed an embargo on sale of weapons and military equipment.

The four-engine US-2 aircraft will act as a force multiplier for the Indian Navy, allowing it to quickly insert troops at places where there is no landing strip on shore, including the numerous far-flung islands in Andaman and Nicobar and Lakshwadeep. 

Currently, ground troops are delivered to areas like this using a 'Landing Ship Tank' which isn't always effective. The Sea Planes will allow faster troop insertion of small clusters of soldiers for specialised operations.

India's coastline runs nearly 7,500 kilometres and the Navy had earlier projected a requirement of 15 such sea planes, but their acquisition was stalled by a shortage of funds and other competing requirements, seen as more urgent - like acquiring multi-role helicopters, torpedoes, submarines and ships. 

The US-2 is one sturdiest aircrafts and can operate in sea state 5 conditions (wind speed of 30 to 38 km per hour) on the high seas as well as on rivers and lakes. Each plane can carry about 30 personnel and lift 18 tonnes and fly 4,500 km at stretch without needing to stop for refuelling. 

Story First Published: September 01, 2014 21:30 IST

Source: NDTV

Mahindra & Mahindra prefers consortium for defence; in talks with BAE, others

NEW DELHI: Learning from past experience in bidding for defence orders in India, Mahindra & Mahindra has decided to go the consortium way and is talking to global players, including erstwhile joint venture partner BAE.

"What we have discovered was that it's better to work as consortium because we have so many areas of interests right now," Mahindra Group Chairman and Managing Director Anand Mahindra told PTI in an interview.

Last year in February, the group had ended its joint venture with BAE Systems by buying out the partner's 26 per cent stake. The JV was formed in 2009 with plans of supplying artillery howitzers and anti-mine vehicles to the Indian armed forces.

"We dismantled the JV because we ran out of patience. Nothing was happening," he said.

Mahindra said that with the new government led by Narendra Modi in place, things have started to move now.

"They are moving. In certain areas like defence, RFPs (request for proposals) are being floated now," he said.

Elaborating on the group's decision to form consortium rather than enter into JVs, he said: "It's just a practical decision, which we have taken that given the number of areas we are in, we are probably better off bidding for large projects... JV is not the right way to do it. The right way to do is through consortium."

When asked about global players that the group was talking for such projects, Mahindra said: "We are in fact talking to the BAE again and to all the others... We are talking to BAE for the same bid, but we are saying that we do not know, so let's not go through the JV thing once again. Let's form a consortium."

He said while the easing of FDI norms to allow up to 49 per cent in defence was welcome, what was more important was to take "quick and transparent" steps.

"Suddenly we find out RFPs are being made. Will it be followed up? Will spending be carried out? Will the process be quick and transparent?" he wondered.

Mahindra further said: "Even at 26 per cent we had the partner BAE and they were ready to do business. That's not the problem. The problem was is the process of procurement happening. Is it happening transparently and predictively? And that's what will change defence and get production in."

Source :Economics TImes

Indian Defense Ministry to decide fate of Rs 6,000 cr light helicopter deal

New Delhi: The Defence Ministry will decide the fate of the controversial Rs 6,000 crore deal to procure 197 light choppers which has been on hold due to an ongoing CBI probe into charges that a Brigadier had sought bribe from AgustaWestland to help it bag the contract.

During a meeting of the Defence Acquisition Council (DAC) scheduled this week, the Defence Ministry will also discuss deals worth around Rs 15,000 crore for procuring Apache attack helicopters and Chinook heavylift choppers for the IAF from the US, Defence Ministry officials said. The DAC, headed by Defence Minister Arun Jaitley, is scheduled to take up the deal for discussion in its meeting where it is expected to decide its fate, they said. The 197 light utility choppers are to be procured for the Army and the IAF who use them for ferrying troops and supplies in high altitude areas such as Siachen Glacier and would be used to replace the vintage Cheetah/Chetak choppers which were inducted 40 years ago. CBI has been probing allegations against the Brigadier which surfaced during investigations into the VVIP chopper deal about the alleged involvement of AgustaWestland in paying kickbacks to secure the Indian contract for 12 VVIP choppers. CBI probe was ordered by the Defence Ministry after the Army requested it to investigate the charges against the Brigadier before taking any decision on the future developments in the deal. Allegations have been levelled against the Brigadier in a letter allegedly sent by an AgustaWestland official in India to his superiors in Italy saying the officer was seeking USD 5 million for facilitating the deal in their favour. Only two firms European Eurocopter and Russian Kamov are left in the race for the deal to supply 197 light choppers to the Army and the IAF as AgustaWestland was knocked out of the deal in the preliminary stages itself. The deal for procuring 197 light choppers has already been cancelled once in 2007 in the last stages. The Brigadier has denied the charges made against him.

Source : Zee News

India imposes ‘Partial Ban’ on Finmeccanica

NEW DELHI: India will not ink fresh arms deals with Finmeccanica, if other armament companies can provide the same equipment, but will allow ongoing contracts with the Italian conglomerate to continue unhindered.

This “partial ban” — instead of what could have been a “complete” one — was officially notified by the defence ministry on Tuesday. It will come as “a major breather” for Finmeccanica, all dealings with which were earlier put on hold after its UK-based subsidiary AgustaWestland got enmeshed in the infamous VVIP helicopter kickbacks case. It also marks a shift from the earlier UPA era, under A K Antony as defence minister, where there was “indiscriminate blacklisting” of armament companies after allegations of corruption and bribery. “It often proved counter-productive. The aim now is not to block military acquisitions and spares, even as any wrongdoing is punished,” said an official. This is the second such case after the Narendra Modi government ruled out blacklisting of global engine manufacturer Rolls-Royce, which too is under CBI scanner for allegedly employing agents, on the grounds of “operational urgency and national security”. As was first reported by TOI on August 7, attorney general Mukul Rohatgi had advised the MoD that a complete ban or blacklisting of the entire Finmeccanica group, which produces warship guns and torpedoes to helicopters and radars, would jeopardize the battle-readiness of the armed forces. On Tuesday, the MoD issued a graded set of guidelines for dealings with Finmeccanica: * It will go ahead with all contracts under execution. Contracts already executed but requiring supply of spares and upgrades on a regular basis will also continue. This means ongoing contracts for manufacture of 76mm warship guns by BHEL under licence from Otomelara, a subsidiary of Finmeccanica, as well as those for Selex radars and electronic systems will continue. * Contracts where any Finmeccanica company is a sub-contractor or supplier to the main contractor will also continue. So, Russian upgrades of the Kamov-28 anti-submarine helicopters, where a Finmeccanica company is a supplier, will go-ahead. * All acquisition cases where Finmeccanica has been declared L-1 (lowest bidder) after competition shall be put on hold till further orders. A special exception for the Rs 1,800 crore project to buy 98 ‘Black Shark’ heavyweight torpedoes for the Scorpene submarines being constructed at Mazagon Docks is likely to be done. * In an ongoing tender process, in which L-1 has not been declared, Finmeccanica may not be considered if other vendors are available. But Finmeccanica may remain in the fray to supply naval multi-role helicopters to avoid a single-vendor situation. * A fresh tender or RFP (request for proposal) will not be issued to Finmeccanica if there are other vendors which can provide the same equipment or system. This could rule out Otomelara from participating in the new project for heavy 127mm guns India is now looking for new warships. As earlier reported by TOI, one estimate holds Finmeccanica, apart from ongoing contracts like the supply of Selex radars or Otomelara naval guns, is in contention for Indian military contracts worth over $6 billion. The crucial ones include the Rs 1,800 crore project to buy 98 ‘Black Shark’ heavyweight torpedoes, manufactured by another Finmeccanica subsidiary Whitehead Alenia Sistemi Subacquel (WASS) for the six Scorpene submarines being built at Mazagon Docks in Mumbai. Another case is for the procurement of naval multi-role helicopters (MRHs), with the contenders being European NH-90 choppers, which have Finmeccanica as a partner, and the American Sikorsky-70B choppers. The first contract for the 16 MRHs is to be followed by a bigger one for 123 helicopters at a cost of over $3 billion.

Source : TNN

Indian firms tool up for defence orders on Modi’s ‘buy India’ pledge

(Reuters) – Some of India’s biggest companies are pouring billions of dollars into manufacturing guns, ships and tanks for the country’s military, buoyed by the new government’s commitment to upgrade its armed forces using domestic factories.

India, the world’s largest arms importer, will spend $250 billion in the next decade on kit, analysts estimate, to upgrade its Soviet-era military and narrow the gap with China, which spends $120 billion a year on defence. Under the last government, procurement delays and a spate of operational accidents – especially dogging the navy – raised uncomfortable questions over whether India’s armed forces are capable of defending its sea lanes and borders. Even before his landslide election victory in May, Prime Minister Narendra Modi promised to assert India’s military prowess and meet the security challenge posed by a rising China and long-running tensions with Pakistan. Within weeks of becoming prime minister, he boosted defence spending by 12 percent to around $37 billion for the current fiscal year and approved plans to allow more foreign investment into local industry to jump-start production. Launching a new, Indian-built naval destroyer last week, Modi said: “My government has taken important steps in improving indigenous defence technology … We can guarantee peace if our military is modernised.” This build-up comes as Southeast Asian nations expand their own defence industries, spurred by tensions with China. India, reliant on a state defence industry that often delivers late and over budget, risks being caught flat-footed. “The opportunity is huge,” said M.V. Kotwal, president (Heavy Engineering) at Larsen and Toubro Ltd, one of India’s biggest industrial houses. “We really expect quicker implementation. There are signs that this government is very keen to grow indigenisation,” added Kotwal, referring to increasing domestic production. Tata Sons, a $100 billion conglomerate, said last month it will invest $35 billion in the next three years to expand into new areas with a focus on a handful of sectors including defence. Larsen is putting $400 million into a yard to build ships for the navy, while Mumbai-based Mahindra Group is expanding a facility that makes parts for planes, including for the air force, and investing in armoured vehicle and radar production. The companies are being lured by the prospect of lucrative returns on their investments as the Modi government has pledged to make “buy Indian” the default option for future orders. Larsen is targeting a fourfold increase in annual defence revenue to $1 billion within the next five years. Critics of indigenisation argue that producing gear – especially in the lumbering state sector – is more costly than buying from abroad. Such deals can add layers of bureaucracy, increasing risks of corrupt dealings. Indian industry is renowned for its ability to adapt, yet questions remain whether the private sector can come up with the solutions needed to bring armed forces into the 21st century without sufficient access to world-class foreign technology. DELAYS Some companies are also sceptical of the government’s commitment to grow the private market given New Delhi’s history of delays and order cancellations, and the traditionally strong ties between the military and state-run manufacturers. They cite the case of a $10 billion Future Infantry Combat Vehicle (FICV) programme. Conceived in 2009, the defence ministry invited three private players and the Ordnance Factory Board, a state entity, to bid for the 2,600-vehicle contract but suddenly withdrew the letter of intent in 2012. Bidders included Mahindra and Tata, which is developing a vehicle along with Lockheed Martin Corp and General Dynamics Corp that could compete for a future contract, said Rahul Gajare, an analyst at Edelweiss Securities. A quick decision to relaunch the programme would demonstrate Modi’s resolve, said S.P. Shukla, who heads Mahindra’s defence business. Past tenders have stalled amid wrangling over whether or not to allow state manufacturers to bid and under what terms. Larsen’s Kotwal said its Kattupalli shipyard in south India has yet to receive any orders for warships or submarines despite being designed to do just that and despite past government pledges to build at least two submarines in private yards. In the meantime, the yard has switched to constructing and repairing commercial vessels. “The policy in India has been right since 2006. The problem has been implementation,” said Rahul Chaudhry, CEO at Tata Power SED, which makes rocket launchers, sensors and radars. Local firms have captured a fraction of the Indian defence market since it first opened to private participation in 2001. Consecutive governments have handed orders to state factories or to foreign giants like Boeing, Lockheed and BAE Systems. Gajare at Edelweiss estimates total India private sector revenues from defence, including overseas orders, at below $2 billion last year, less than 6 percent of the country’s defence spending.   Source :Defence News

Rafale fighter jet deal contract with France almost ready: Defence ministry

The much-awaited multi-billion Rafale combat aircraft deal with France has moved a step further with the defence ministry finalizing a ‘draft contract’, according to top defence ministry officials.

Rafale was declared the lowest bidder in Janaury 2012 but the deal has not been inked so far on account of escalation in the cost. The Cost Negotiation Committee, which was set up in February 2012 to work out the modalities for the deal has not reached a conclusion after 30 months of negotiations. The government raised its concerns over this last month, during the visit of French foreign minister Laurent Fabius to New Delhi. “Yes, we are in the process of finalizing the draft contract for the deal. And we also expect the Cost Negotiation Committee to submit its report soon,” said a senior defence ministry official, who was privy to the developments. But the official refused to give a time frame for inking the deal. “It is very difficult to predict any date for signing the contract. But, it should happen in the next few months,” the officer said, requesting anonymity. The Indian Air Force (IAF), which is coping with a depleted combat strength, claims that even if the deal is signed by the end of the year the first lot of Rafale aircraft would arrive only by 2017, by which time the IAF would have to phase out its MiG-21 squadrons. The likelihood of an early signing is encouraging. Besides, the ruling NDA government has promised to address all the needs of the armed forces to ensure defence preparedness. According to officials privy to the development, the defence ministry has asked representatives of M/s Dassault Aviation – the French manufacturer of Rafale aircraft – to revise the price structure which has gone beyond expected estimates. Officials claim that when the tender was floated in 2007 the cost of the programme was $12 billion (Rs42,000 crore).When the lowest bidder was declared in January 2012, the cost of the deal shot up to $18 billion (Rs90,000 crore). Now with the inclusion of transfer of technology, the life cycle cost and creation of an assembly line, the deal has climbed to a whopping $20 billion. The air force is seeking to replace its aging MiG-21s with a modern fighter and the medium multi-role combat aircraft (MMRCA) fits between India’s high-end Sukhoi-30MKIs and the low-end Tejas LCA lightweight fighter. The IAF has a sanctioned strength of 45 fighter jet squadrons. However, only 30 squadrons are operational as old aircraft have been retired. Eighteen of the 126 new aircraft are to be purchased directly from Dassault and Hindustan Aeronautics Limited will manufacture 108 under a licence, at a new facility in Bangalore. Defence minister Arun Jaitley informed parliament last week that “given the complexity of the procurement case, the process of negotiations with Dassault Aviation on various aspects of the commercial proposal and provisions of draft contract is on.” Dassault Aviation emerged as L-1 bidder for procurement of the MMRCA based on its quotation.   Source : Defence NEws

Indian defence modernisation plan needs pragmatic action

The Army’s war waging capability is increasingly handicapped. Concerned with dwindling operational preparedness and operationally hard pressed, it wants to induct advanced technology hardware that it perceives would serve its operational needs optimally.

The NDA government has identified defence reforms and building a self sustaining defence industrial base as a priority reform sector. To transform this into reality, it is not so much of the government commitment but its ability to take policy decisions and put processes in place by spurring public and private sector investments through higher indigenisation, transfer of technology, simplifying procedures, etc. The Army’s war waging capability is increasingly handicapped. Concerned with dwindling operational preparedness and operationally hard pressed, it wants to induct advanced technology hardware that it perceives would serve its operational needs optimally. However its efforts at modernising be it combat or combat support arms are hardly encouraging – plagued by procurement and indigenous production delays and lack of timely planning. The Parliamentary Standing Committee on Defence’s figures reveals that the army’s equipment modernisation is steadily falling. In 2008-09, the army spent 27 paisa of every rupee on capital expenditure. This fell to 24 paisa in 2009-10; 23 paisa in 2010-11; 20 paisa in 2012-13 and just 18 paisa in the last two years. Indian army’s mechanised fleet comprises T-72 and T72 M1s Main Battle Tanks (MBTs), T-90S MBTs and indigenously produced Arjun MKI tanks. The main issue facing operational efficiency of mechanised forces are two: night fighting capability and ammunition. Resultantly the army’s ambitious plans to transform from a ‘threat-based to a capability force’ by 2020 are being consistently thwarted as a result of process driven MoD breaucracy and the Army headquarters delays in drawing up credible qualitative requirements. Army’s Modernization Perspective :: Let us take the armour first. Indian army’s mechanised fleet comprises T-72 and T72 M1s Main Battle Tanks (MBTs), T-90S MBTs and indigenously produced Arjun MKI tanks. The main issue facing operational efficiency of mechanised forces are two: night fighting capability and ammunition. In so far as night fighting capability is concerned only the 650-odd Russian T90S MBTs along with indigenously designed Arjun MKI tanks have full solution night fighting capability. T-72 and T72M1s that form the backbone of 59-odd armour regiments along with some 2200 Soviet-designed BMP-II infantry combat vehicles (ICVs) lack night fighting capability. Majority of the T72s await upgrades that will provide them with either full solution thermal imaging fire control systems (TIFCS) or third generation partial solution thermal imaging stand alone systems (TISAS) enabling all weather including night operations. Till date only 620 partial solution TISAS have been acquired. In terms of armour ammunition there is critical deficiency of anti tank ammunition; 125 mm armour piercing fin-stabilised discarding sabot (APFSDS). Indigenous production is held up on account of black listing of Israeli company, resultantly availability of 125 mm APFSDS including war wastage reserves have dropped to critical levels necessitating urgent imports of around 66,000 rounds from Russia at highly inflated prices. Next major deficiency is that of Artillery, where no new gun has been inducted in last three decades. Despite years of attempts at modernisation; army’s artillery profile remains beseeched by the inability to decide on the 155 mm gun to replace the 180-odd field artillery regiments employing as many as six different calibres that are fast approaching obsolescence. Even the 32 artillery regiments equipped with 410 FH-77B 155 mm Bofors guns imported in the late 1980s-are reduced to half following cannibalization owing to the non-availability of spares. Upgradation of approximately 200 Soviet 130 mm M-46 carried out jointly by the Ordnance Factory Board and Soltam of Israel has been unsatisfactory resulting in CBI enquiry. The proposal under the Artillery Rationalisation Plan to acquire by 2020-25 a mix of around 3000-3600; 155mm/39 calibre light weight and 155mm/52 calibre towed, mounted, self-propelled (tracked and wheeled) and ultra light weight 155mm/39 calibre howitzers through imports and local, licensed manufacture have been continually postponed for over a decade. Tenders for almost all these guns have been issued, withdrawn and re-issued, along with several rounds of inconclusive trials. Matters have been further complicated by the MoD completely or partially blacklisting at least four top overseas howitzer manufacturers. The infantry’s F-INSAS (Future Infantry Soldier as a System) project that includes a fully networked, all-terrain, all-weather personal equipment platform as well as enhanced firepower and mobility for the digitalised battlefield of the future continues to be abnormally behind schedule. Similarly eight-odd Special Forces battalions face an identity crisis, operating without a specialised operational mandate, organisational support or “dedicated budget” resulting in piecemeal and incomplete weapon and equipment packages. Adding to the Infantry’s woes is the shortages of credible assault rifles (ARs), carbines, ballistic helmets, lightweight bullet proof jackets and night vision devices. These are largely produced indigenously. Last year the MoD issued a global tender for 66,000, 5.56 mm ARs for an estimated $ 700 million to replace the locally designed Indian Small Arms System (INSAS). The eventual requirement for the proposed AR is expected to be around 2 million units for use not only by the army but also the paramilitary forces and the numerous provincial police forces in a project estimated to cost around $3 billion. Other infantry shortages include; close quarter battle carbines, general purpose machine guns, light-weight anti-materiel rifles, mine protected vehicles, snow scooters for use at heights above 21,000 feet in Siachen, 390,000 ballistic helmets, over 30,000 third generation NVDs, 180,000 lightweight bullet proof jackets together with other assorted ordnance including new generation grenades. Similar is the story of air defence. The bulk of the army’s air defence guns – Bofors L 70s and the Soviet Zu-23-2s and ZUS-23-4s and missiles like the Russian OSA-AK and Kradvat – date back 30-40 years and need replacing. The Army Aviation also faces similar shortages. There is an urgent need to replace obsolete aviation assets like the Chetak and Cheetah helicopters. Acquisition of 197 helicopters under the Army Aviation Corps Vision 2017 was postponed after the procurement of Eurocopter AS 550 C3 Fennec was scrapped in November 2007. Four years later after trials, evaluation and negotiation the contract is under re-assessment featuring Russia’s Kamov 226 and Eurocopter’s AS 550 models, with little chance of early conclusion. Addressing Army’s Modernization Needs :: The major issue that emerges is how will the army get out of the vicious cycle of delays in procurement, and get its modernisation plans back on track. Is it feasible to undertake an all encompassing procurement backed by indigenous production taking the transfer of technology (TOT) route? What are the likely constraints? Let us take a look at the budgetary support first? The Defence Budget for 2014-15 has an allocation of Rs. 2, 29,000 crores ($38 billion) an increase of 12 per cent over the previous year’s allocation. The capital outlay is Rs.94, 588 crores ($15.7 billion), and the remaining allocation of Rs. 1, 34,412 crores is the revenue outlay. The sub allocation of capital outlay to Army is Rs. 20, 655 crores, Navy Rs. 22, 312 crores, Air force Rs. 31,818 crores, DRDO Rs.9298 crores and modernization of Ordnance Factories (OFs) Rs. 1, 207 crores. While the figures might look impressive it needs to be noted that fairly large amount of capital outlays get consumed by committed liabilities leaving fairly modest amounts for new procurements. Second, even if the money was available how can the army make up such huge shortages in any acceptable time frame? Procurement procedures, deciding on vendors for transfer of technology, issues regarding off sets, participation of the private sector and above all skill development are long drawn process which in the best case can take anything from 5 to 7 years. To deal with the problem two critical aspects need to be addressed: One, the nature of future threats both in short-and-medium-to-long-terms basis. If the trigger for conflicts is likely to be unacceptable provocation requiring immediate military response; this requires basic level of preparedness and modernization to deal with such contingencies. Two, the long-term capability needs require a more nuanced and detailed induction perspective more attuned to R&D, technology transfers and indigenous production, etc. The essential take away from the above analysis is two-fold – laying down induction priorities and tri service synergy. [Author Brigadier (Retd.) Arun Sahgal, PhD, is Deputy Director Research and Head, Centre for Strategic Studies and Simulation, at the United Service Institution of India. He is a member of National Task Force on Net Assessment and Simulation, under the NSCS, Government of India.]   Source : Defence News

Why is India offering to buy more US helicopters

(Reuters) – India has offered to significantly increase an order for U.S. attack helicopters, Indian officials said, as U.S. Defense Secretary Chuck Hagel began a visit to New Delhi on Thursday aimed at boosting defence and strategic ties.

The Apache gunships and a deal for Chinook helicopters, both built by Boeing, will top the agenda in Hagel’s talks on Friday with the new administration led by Prime Minister Narendra Modi. India has offered a follow-on order of 39 AH-64D Apache helicopters in addition to the 22 now being negotiated, a Defence Ministry official said. The sides have been wrangling over the price of the gunships, however, with the initial deal having been estimated to be worth $1.4 billion. The two countries have rapidly expanded military and business ties in recent years, despite discord over issues such as intellectual property rights and market access. Washington is keen to step up cooperation across the board, seeing India as a strategic partner in the face of an increasingly powerful and assertive China. According to defence research firm IHS Jane’s, India was the top foreign buyer of U.S. arms last year. An Apache deal would be the first big military contract since Modi’s government took office in May. Hagel’s trip follows one by U.S. Secretary of State John Kerry last week and is part of the build-up to talks between Modi and President Barack Obama in Washington in September. Hagel’s talks will also cover military exercises and co-production and co-development of armaments and the renewal of a 10-year defence cooperation agreement that runs until 2015. Hagel said the purpose of his visit went beyond arms sales. “Our interests are varied and common – stability, security, economics, possibilities, freedom,” he said en route to India. “I’ll be there, working, yes, our specific issues, but it’s larger … than that.” “WE NEED PARTNERS” Hagel said Asia-Pacific was a region of great opportunities, but also of challenges. “We need partners. We need relationships. That’s the kind of world we live in, and that’s the kind of world that we’re going to be living in.” Speaking to reporters on his plane, Hagel was asked about India’s apparent reluctance to be seen as a full U.S. ally and he replied that Washington was “mindful” of India’s tradition as a independent, non-aligned state. “We’re not trying to change that,” he said. “But…we have common interests, and…we think there’s more potential to build on those common interests.” U.S. officials say there is the potential for billions of dollars of new arms sales in the next few years and hope Modi can overcome bureaucratic obstacles that have held up some. Last month, India’s cabinet cleared a proposal to allow 49 percent foreign participation in the defence industry, up from a current cap of 26 percent. Hagel said he would be looking at whether there would be the potential to go beyond 49 per cent something U.S. defence firms want before allowing technology transfers India craves. The initial batch of Apache helicopters is meant to replace the Indian Air Force’s ageing fleet of Soviet-era aircraft and will be armed with Hellfire and Stinger missiles. The Indian Army has separately requested a fleet of at least 39 of these attack aircraft, some of which will be deployed as part of a new mountain division it is raising along the disputed border with China, an army official said. “The point is we are looking at 60 to 70 pieces eventually, so the expectation is the vendor will factor that in, in the price negotiations,” said the defence ministry official, who asked not to be identified in line with ministry policy. U.S. defence sales to India have grown from the low hundreds of millions of dollars in the decade to 2008 to more than $9 billion since that year.   Source : defencenews.in

FDI in defence may go up to 100% if CEO is Indian

Global defence equipment majors such as BAE Systems and Lockheed Martin could set up manufacturing units in India and bring in foreign direct investment (FDI) exceeding 49 per cent, provided the company’s chief executive officer (CEO) is Indian.
As the objective was to let only serious players enter the market, the defence FDI policy approved by the Cabinet on Wednesday categorically stated investee companies should be self-sufficient in product designing and have maintenance and life cycle support facilities for the products they manufactured here, said a senior department of industrial policy and promotion (DIPP) official.

The Union Cabinet had approved an increase in the composite foreign investment cap in the defence sector from 26 per cent to 49 per cent. For investment exceeding 49 per cent, the Cabinet Committee on Security (CCS) will clear applications on a case-by-case basis.
“It could go up from 49 to 100 per cent, depending on modern and state-of-the-art technology, with the approval of the CCS,” said the DIPP official.
The CCS might consider such proposals only in rare cases in which original equipment manufacturers such as BAE Systems, Lockheed Martin, Airbus Group and Sikorsky intend to set up manufacturing units here.
This is aimed at ensuring only top defence original equipment manufacturers, with robust and proven track records, enter the market, with large-scale investment proposals. The government is hopeful this will not only lead to more manufacturing facilities in the country, but also ensure the life cycle of products is catered to by foreign companies.
The CCS will see to it that the management and control remains with Indian companies in case the FDI exceeds 49 per cent, more so in case it is more than 51 per cent, on a case-by-case basis. The official said in these cases, the CEO had to be Indian.
However, experts say subjective norms such as modern and state-of-the-art technology, self-sufficiency in product designing and maintenance and life cycle facilities will be hurdles to attracting FDI.
Amber Dubey, partner and head of aerospace and defence, KPMG in India, said, “Subjective conditions such as local design, maintenance repair and overhaul, lifecycle support facility and state-of-the-art technology run the risk of interpretation, delays, misuse and litigation. Once an original equipment manufacturer wins a competitive tender, market forces will force these to be transferred to India in stages.” 
Putting onerous preconditions ended up discouraging serious investors, Dubey said, adding the government could, instead, bring in practical checks and balances that would help build a strong defence industrial base in India through 10-15 years. 
“The CEO has to be an Indian national by default, from the perspective of national security and individual accountability. It would be practically difficult to get a CEO of foreign nationality extradited to India and prosecuted in case of an adverse event,” he said. 
Officials said all foreign institutional investment up to 24 per cent would be allowed under the automatic route. The DIPP official said proposals related to FDI exceeding 26 per cent would be approved on a case-to-case basis, apparently due to “national security concerns, as it (defence) is a highly sensitive sector”. 
Since the Indian defence sector was opened to private companies in 2001, barely $5 million of FDI has flowed into it, according to official statistics.

Nayanima Basu in New Delhi

Source:

US eyes big-ticket arms deals during Hagel’s visit

With US Defense Secretary Chuck Hagel set to visit India tomorrow, noted American experts said his maiden trip to the country, in the early days of the new government, will give a much-needed thrust to the Indo-US defense ties.

Hagel, the second US cabinet minister to meet Prime Minister Narendra Modi, this week, will be accompanied by a high-power delegation of military leadership. The Defense Secretary, during his three-day visit will hold talks with Defence Minister Arun Jaitley, and is also expected to meet National Security Advisor Ajit K Doval and External Affairs Minister Sushma Swaraj.“The purpose of this trip is to nurture the relationship and not to ink any deal,” Pentagon Press Secretary, Rear Admiral John Kirby told PTI ahead of the trip. Hagel’s meetings will focus on the converging interests of India and the US in the Asia Pacific, their common interests in Afghanistan and initiatives to strengthen bilateral defense cooperation, including military exercises, defense, trade, co-production and co-development, and research and new technologies, Kirby said. Assistant Secretary of State for Political Military Affairs, Puneet Talwar will also accompany Hagel. “Bilateral defence ties are stronger than they have ever been, and poised to deepen further,” said Alyssa Ayres, senior fellow for India, Pakistan, and South Asia at the Council on Foreign Relation. “On matters of strategy, a high-fidelity conversation between Hagel and Jaitley about regional security will build confidence between the two new counterparts,” Ayres said. According to Richard M Rossow, Wadhwani Chair in US India Policy Studies, at the Center for Strategic and International Studies, India US defense ties have been the ballast for the relationship in the last year. “Losing the MMRCA bid was painful, but the Department of Defense rebounded quickly, launching the Defense Trade Technology Initiative (DTTI). Defense sales by American firms are increasing, and joint exercises – highlighted by the recent Exercise Malabar,” he said. “Anything really big that is close to ready for announcement would typically be held for when the two heads of state meet in September,” Rossow said.  Source: Defencenews

Indian Union cabinet approves FDI in defence, railways

The Union Cabinet on Wednesday approved a proposal to raise the cap on Foreign Direct Investment (FDI) in the defence sector from 26% to 49%, a move aimed at accelerating indigenisation and bringing in modern technologies to meet the requirements of the armed forces.
Finance minister Arun Jaitley had announced in his budget speech that the FDI cap in defence manufacturing would be increased to 49%, with full Indian management and control through the Foreign Investment Promotion Board (FIPB) route.
Foreign firms haven’t made significant investments or set up defence manufacturing facilities, with the 26% cap on FDI dampening their enthusiasm to pump money into the country.

Barely $5 million of FDI has flowed into India since the defence sector was thrown open to private companies in 2001 by then NDA government.
However, it remains to be seen if lifting the FDI cap to 49% would lead to a significant inflow of foreign investment into the country and lead to greater indigenisation as there are some who have been advocating raising the limit to 74%.
Former defence minister AK Antony had opposed lifting the 26% cap on FDI. He had attacked the NDA government last month for increasing the FDI cap to 49% in the Budget, saying that it would hurt national security.
He had said, “I know a very strong lobby is working. Their demand is 100% FDI in defence. Successive governments since 1991 have overcome such pressure tactics. Their decision not to grant FDI beyond 26% was well thought out.”
However, the commerce ministry under the UPA regime had batted for raising the FDI cap to 74% to encourage foreign firms to invest in India.
100% FDI in railways
The government also approved a proposal to allow 100% foreign direct investment (FDI) for building railways infrastructure. Foreign capital in railways was not allowed till now.
However, the new government led by Prime Minister Narendra Modi has been pushing for it to build infrastructure projects such as high-speed railways and railway lines to and from coal mines and ports.
Currently, the cash-strapped railways cannot fund these projects without private participation. Foreign players from Japan and China are said to be keen to participate in building up of the infrastructure.
(With IANS inputs)
Source : Hindustantimes