FICCI recognises the strategic nature of the defence sector and therefore advocates that adequate and mutual strategically beneficial safeguards be put in place while deciding higher levels of FDI in defence production.
allowing FDI even up to 100% should be allowed as exceptions, on case
to case basis, in cases such as aircraft engines, advanced missile
guidance systems, seekers, production of smart materials, high
strength carbon fibre etc, for which investments can be justified
only by volumes available through integration with the global supply
chain of the OEM's .
Obviously, the current level of seventy percent for imports in case of defence equipments, is not in sync with India's aspiration to be a global super power. FICCI strongly advocates the need for absorption of "know-why" in critical defence technologies without which the aim of substantive self-reliance and higher levels of indigenisation cannot be achieved.
India must therefore make use of FDI limit enhancement to leverage its position as one of the largest markets for defence equipment to achieve this strategic goal. It is important to note that no other country with a strong indigenous technical & industrial base allows the levels of FDI in defence that are being offered by India.
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