Skip to main content

Govt set to allow over 49% FDI in defence

By
The government has got down to formalising norms for allowing over 49% foreign direct investment in defence production after French company DCNS proposed to set up a wholly owned Indian arm to develop advanced systems for submarines.
The department of defence has held a few round of consultations with other ministries with other ministries and also discussed the issue with stakeholders, said sources. There is a thinking within the government that it would be best not to have a fixed set of norms, and instead take a view on the merits of an individual case.
While the govern ment allowed 100% FDI in defence manufacturing, it was decided that overseas investment up to 49% would be allowed via the automatic route and a higher stake would be permitted on a case-to-case basis if a state-of-the-art product was being brought in with access to technology .
“So far, there were no guidelines on how to deal with cases where majority foreign ownership is proposed. We are trying to put in place a standard operating procedure,“ an officer said. The move comes ahead of next week's meeting of the Fore ign Investment Promotion Board, where DCNS's proposal is listed.The proposal can be deferred if there is no consensus on the guidelines or need to have a stringent set of rules that reduce flexibility.
DCNS is looking to bring Air Independent Propulsion (AIP) systems into the country , which are seen to provide more underwater endurance to conventional submarines. Earlier, news reports had sa id that the French firm plans to develop AIP equipment in partnership with Indian companies.
The Narendra Modi government is keen to rope in the private players and overseas investors in the hitherto closed sector. Even the defence ministry , which was earlier reluctant to allow private players and preferred to import equipment, often involving middlemen, is now amenable to the change.
Despite the massive interest in recent months, between 2000 and 2015, FDI inflow in the sector was estimated at $5 million (Rs 25 crore), just higher than that in the coir industry , data with the department of industrial policy and promotion showed. This indicated that projects haven't taken off and defence orders have not been forthcoming.
Times of India New Delhi,23 April 2016

Comments

Post a Comment

Popular posts from this blog

Data storage norm splits digital payments industry

By
Data storage norm splits digital payments industry  India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move.  In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET.  “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week.  RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...
18 comments
Read more

Sebi to finalise options in commodities today

By
The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...
17 comments
Read more

E tailers global warehouses may come under tax net

By
E tailers  global warehouses may come under tax net Warehouses of e-commerce companies based in countries such as Australia, Japan, Italy,  Spain, the Netherlands, and Russia may not be exempted from paying the income tax in India  once the multilateral instrument (MLI) to prevent base erosion and profit shifting (BEPS)  comes into force. BEPS refers to the reporting framework mooted by the Organisation for Economic  Co-operation and Development (OECD) and signed by over 100 countries, including India, to  prevent exploiting gaps and mismatches in tax rules to shift profits by multinational  companies (MNCs) artificially to low-tax regimes. The representatives of 68 countries on June 7 this year signed an agreement (MLI) in Paris  to amend their tax treaties to bring them in alignment with measures to prevent BEPS.  However, there is still time for synchronising tax treaties with the multilateral  instrument. India has submitte...
17 comments
Read more