The Hindu Business Line : Govt open to selective 49% FDI in defence

New procedures: Mr A. K. Antony (left), Union Defence Minister, and Mr Sajjan Jindal, President, Assocham, at a defence summit in the Capital on Saturday. –

Our Bureau

New Delhi, Sept 20 The Centre on Saturday said it could consider the industry’s demand for allowing up to 49 per cent foreign direct investment (FDI) in the defence sector “on a case-to-case basis”. “We will stick to the policy of allowing 26 per cent FDI in Indian defence sector. We could consider allowing 49 per cent FDI only on a case-to-case basis, if the industry is able to convince us,” the Defence Minister, Mr A.K. Antony, told an Assocham seminar on Defence Procurement Policy here.

Stating that the Government was in favour of transparency in its defence deals, Mr Antony told the industry that there would be no secrecy surrounding the tendering process. “We believe in open deals. There will be no veil of secrecy in the Request For Proposals. Details would be made available to all industry representatives by placing the tenders on the Net, except in the most sensitive cases, which is a minuscule number,” he said.

Allotment norms

Mr Antony said best equipment at affordable prices would be the norm for allotment of contracts. “Earlier, only a select few companies got the RFP. But with the implementation of the new Defence Procurement Procedure-2008 (DPP-08), we will ensure every industry gets the tender details. This way we ensure transparency and also widen vendor base,” he said.

Noting that DPP-08 contained certain significant changes from the earlier policy of 2006, he said the present volume aimed at strengthening the procurement framework and making it more transparent and impartial. “The experience of the past two years of those involved in acquisition and the feedback from various industry bodies has been incorporated in DPP-08. Yet, we cannot satisfy every stakeholder, as some other suggestions from the industry have not been included,” he said.

A major change, Mr Antony said, was the inclusion of broad details of the trial methodology forming part of the RFP so that vendors were aware right at the outset about the modalities for product evaluation. “Similarly, directions to vendors during the course of trials and the results of the evaluations along with the reasons for disqualifications, if any, will now be communicated in writing to them and placed on record,” he added.

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Govt open to selective 49% FDI in defence