India is set to garner defence business worth $10 billion in the 11th Five Year Plan as a result of its offset clause in the Defence Procurement Policy.
Junior defence minister Pallam Raju told reporters on the sidelines of a DRDO seminar on Thursday that the value of business that would be generated in India over five years would amount to Rs 40,000 crore. "This is because we have made it mandatory that anyone investing over Rs 300 crore in a defence project under this policy has to source 30% of the business from India itself." Effectively, they have to plough back 30% of their earnings from any project within the country. And that leads to development of defence industry.
"We also expect greater participation of private companies from abroad because of this offset clause. DRDO and defence in India certainly need a private-public partnership. We expect private players to move from being mere subcontractors to integrators of systems. Private sector will have a big role in the coming years in Indian defence," Raju said.
There is also an indication that FDI in defence could go up. "It is 26% now. But we are looking to relax it in future as per our new DPP." P S Goel, president, Indian National Academy of Engineering, pointed out that DRDO was taking stock of all that it had done to see where it was heading in defence electronics.
"As of now, the import content is fairly high in electronics. If DRDO can make all that we import, which we will, we can save a lot on resources. The seminar on defence electronics is also a way forward for DRDO."
source : Times of India
Junior defence minister Pallam Raju told reporters on the sidelines of a DRDO seminar on Thursday that the value of business that would be generated in India over five years would amount to Rs 40,000 crore. "This is because we have made it mandatory that anyone investing over Rs 300 crore in a defence project under this policy has to source 30% of the business from India itself." Effectively, they have to plough back 30% of their earnings from any project within the country. And that leads to development of defence industry.
"We also expect greater participation of private companies from abroad because of this offset clause. DRDO and defence in India certainly need a private-public partnership. We expect private players to move from being mere subcontractors to integrators of systems. Private sector will have a big role in the coming years in Indian defence," Raju said.
There is also an indication that FDI in defence could go up. "It is 26% now. But we are looking to relax it in future as per our new DPP." P S Goel, president, Indian National Academy of Engineering, pointed out that DRDO was taking stock of all that it had done to see where it was heading in defence electronics.
"As of now, the import content is fairly high in electronics. If DRDO can make all that we import, which we will, we can save a lot on resources. The seminar on defence electronics is also a way forward for DRDO."
source : Times of India