By: Vivek Raghuvanshi
NEW DELHI — India's Ministry of Defence (MoD) has decided not to give DCNS of France permission to develop a local, fully owned subsidiary to manufacture air-independent propulsion (AIP) submarine systems on the advice of state-owned Defence Research and Development Organization (DRDO), which is developing its own AIP systems, according to a senior MoD official.
DRDO had "impressed" upon the ministry that DCNS wants to bring to India the same technology that DRDO is developing, said the MoD source, who spoke on condition of anonymity.
DCNS is the first overseas company to have sought clearance to invest 100 percent through FDI by setting up a fully owned subsidiary in the defense sector.
The Indian government in June this year changed the FDI laws to make it easier for overseas companies to receive permission for a 100 percent FDI in the defense sector.
However, Arun Prakash, a retired Indian Navy admiral, disagrees with the ministry's decision.
"If we keep a cool head, we should allow this (clearance of DCNS proposal) to proceed uninterrupted. This is most valuable and arcane technology, and there is a lot we can do with it in the future," Prakash said.
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