mayankkrishna
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PORT LOUIS: Commerce and Industry minister Anand Sharma has expressed confidence that India will raise the limit for Foreign Direct Investment (FDI) in the defence sector, indicating that defence minister AK Antony's reservations are part of the wider discussion process in the government.
"This is a dialogue within the government...we will continue to engage with each other... nobody is opposed when it comes to induction of new technologies of manufacturing systems in the country. I am sure that will happen and we will discuss it among ourselves," Sharma said on Friday in Mauritius, where he attended the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) Economic and Business Conference.
The comments came after Antony expressed his reservations on further opening of the defence production to foreign investors, upsetting the ambitious reform that is being driven by the ministries of finance and commerce and industry.
A committee headed by Economic Affairs Secretary Arvind Mayaram had proposed raising the FDI limit in the sector to 49% from 26% as part of the government's ambitious reforms drive to ease restrictions to attract stable capital flows to fund India's large current account deficit.
"There is a viewpoint which is in favour. The finance minister and I and many of our colleagues have been in favour. But defence is a sensitive sector and our aim is for a calibrated approach...I had written to him (Antony) and he has written back.
This (is a) very polite letter," Sharma said. One justification for the higher FDI limit is that it will encourage domestic production of many of the defence items that India imports, helping country save precious forex reserves and also generate jobs.
The counter argument is that allowing higher stake to foreigners in strategic sectors will compromise security.
The government is keen to put in place a framework to encourage long-term foreign capital into the country to address the financing challenge of large current account deficit that stood at a historic high of 4.8% in 2012-13.
The finance ministry is also pitching for expeditious change in the definition of control in the FDI policy to ensure that foreigners do not breach the cap through quasi-equity instruments.
The Department of Industrial Policy and Promotion (DIPP) has floated a Cabinet note for the change in definition that is expected to be taken up soon.
Sharma will meet Finance Minister P Chidambaram on Saturday to take forward the discussions on the FDI liberalisation plan.
The DIPP, the administrative department for the FDI policy, has held formal consultations with all stakeholder ministries and departments on the Mayaram panel's recommendations.
( The correspondent was in Port Louis at the invitation of Ficci and Commerce and Industry Ministry)
India will raise FDI in defence sector: Anand Sharma - The Economic Times
"This is a dialogue within the government...we will continue to engage with each other... nobody is opposed when it comes to induction of new technologies of manufacturing systems in the country. I am sure that will happen and we will discuss it among ourselves," Sharma said on Friday in Mauritius, where he attended the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) Economic and Business Conference.
The comments came after Antony expressed his reservations on further opening of the defence production to foreign investors, upsetting the ambitious reform that is being driven by the ministries of finance and commerce and industry.
A committee headed by Economic Affairs Secretary Arvind Mayaram had proposed raising the FDI limit in the sector to 49% from 26% as part of the government's ambitious reforms drive to ease restrictions to attract stable capital flows to fund India's large current account deficit.
"There is a viewpoint which is in favour. The finance minister and I and many of our colleagues have been in favour. But defence is a sensitive sector and our aim is for a calibrated approach...I had written to him (Antony) and he has written back.
This (is a) very polite letter," Sharma said. One justification for the higher FDI limit is that it will encourage domestic production of many of the defence items that India imports, helping country save precious forex reserves and also generate jobs.
The counter argument is that allowing higher stake to foreigners in strategic sectors will compromise security.
The government is keen to put in place a framework to encourage long-term foreign capital into the country to address the financing challenge of large current account deficit that stood at a historic high of 4.8% in 2012-13.
The finance ministry is also pitching for expeditious change in the definition of control in the FDI policy to ensure that foreigners do not breach the cap through quasi-equity instruments.
The Department of Industrial Policy and Promotion (DIPP) has floated a Cabinet note for the change in definition that is expected to be taken up soon.
Sharma will meet Finance Minister P Chidambaram on Saturday to take forward the discussions on the FDI liberalisation plan.
The DIPP, the administrative department for the FDI policy, has held formal consultations with all stakeholder ministries and departments on the Mayaram panel's recommendations.
( The correspondent was in Port Louis at the invitation of Ficci and Commerce and Industry Ministry)
India will raise FDI in defence sector: Anand Sharma - The Economic Times
