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| Tejas (LCA) Light Combat Aircraft (File Photo) |
By Vivek Mishra
Talk of allowing up to 100 percent foreign direct investment has proven controversial, to say the least.
No sooner had India’s new government announced its intention to move forward with a promised revision of foreign direct investment (FDI) in the defense sector, mooting a 100 percent FDI limit (up from the current 26 percent), and a backlash began. In the vanguard of this opposition lies India Inc.
Look closely and two clear strands can be perceived in the opposition. The first stems from the financial and manufacturing repercussions that India’s domestic defense industries are likely to face in the event of a 100 percent FDI limit. For Indian companies—which include Tata Group, Larsen and Toubro, Bharat Forge, Mahindra and Punj Lloyd—still struggling to find their feet in the areas of manufacturing, production, technology, capital and competitiveness, this concern may well be genuine.
The second apprehension involves those who view India’s defense sector as the sanctum sanctorum of national pride and patriotism. For these critics, any attempt to invite no-holds-barred FDI in this sector is not just a breach of traditional principles, but a financial invasion of sorts.
Read the full story at The Diplomat