Govt. provides private firms level-playing field with defence PSUs to boost manufacturing

The Ministry of Commerce and Industry today said that steps taken to boost defence manufacturing would encourage foreign companies to invest more in India. The government withdrew excise and customs duty exemptions enjoyed by the Ordinance Factory Board and defence PSUs to provide a level-playing field to private players.

"This will provide a level-playing field...by taking away the strategic advantage with PSUs for quoting lower rates in open bids,” as per a PTI report.
"With this initiative, the government has also fulfilled demand of foreign Original Equipment Manufacturers (OEMs) such as Boeing, Airbus, Lockheed Martin, BAE Systems etc which are actively exploring the scope of future investments in India," according to a statement issued by the Ministry of Commerce and Industry.

The statement further said the move would also send a definitive message to foreign OEMs that India is open to business and investment for defence manufacturing.
Moreover, defence manufacturing is one of the key sectors among the 25 sectors identified under the Make-in-India campaign, an initiative by the Modi government.
India is the highest importer of defence equipments in the world. Therefore, Indian aerospace and defence market attract many global players.
The government has systematically opened up the sector for private investment by increasing Foreign Direct Investment (FDI) cap in defence of up to 49% and rationalising certain conditions.
"A number of initiatives have been taken by the new government to incentivise the private sector, including foreign OEMs, to engage in the Defence and Civil Aerospace sector," as per the statement issued by the ministry.
It added that a series of consultations have been held across ministries and departments to enable simplification of rules and procedures to promote private participation in defence manufacturing and exports.

(Image: Indiatimes)