SJM seeks choice in defence acquisition for companies with majority Indian stake

New Delhi, September 1

The Swadeshi Jagran Manch (SJM) on Tuesday sought modifications within the proposed ‘Defence Acquisition Procedure’ guidelines to restrict advantages obtainable for an ‘Indian vendor’ solely to these having majority possession and management with Indian resident residents.

In a letter addressed to Prime Minister Narendra Modi, the financial wing of the Rashtriya Swayamsevak Sangh additionally sought his intervention to make sure that overseas entities didn’t get any benefit over entities owned and promoted by Indian resident residents, just by getting registered in India.

“We are of the considered opinion that procurement from companies registered in India, where majority shareholding is that of foreigners, is no different from imports,” SJM co-convener Ashwani Mahajan mentioned within the letter.

Applauding the federal government’s resolution to ban the import of 101 weapons and platforms in a staggered method, Mahajan mentioned a overseas entity can get registered in India or purchase a majority stake in an Indian agency as as much as 74 per cent FDI is allowed in defence below the automated route.

This approach, a overseas entity may avail the identical ‘special treatment’ in defence procurement below the ‘Buy IDDM (Indian Indigenously Designed Developed and Manufactured)’ framework, that are purported to be meant for Indian entities, Mahajan mentioned.

Requesting that choice in defence procurement must be given to the Indian corporations with Indian shareholding of 51 per cent or above, Mahajan mentioned the definition of ‘Indian vendor’ within the proposed Defence Acquisition Procedure 2020 guidelines must be modified to make sure that overseas entities don’t get any benefit over really Indian entities.

He mentioned the SJM was of the thought of opinion that an ‘Indian vendor’ ought to solely imply an entity by which the bulk possession and management was with Indian resident residents.

Citing experiences about any entity registered in India being thought of an ‘Indian vendor’ for defence procurement, Mahajan mentioned such a definition would trigger a extreme blow to the existence of the home defence trade, each large and small that has developed indigenously, as overseas corporations would begin getting the identical remedy because the home trade.

“More importantly, the dream of self-reliance in defence production, which is so close to your heart, itself will die down. All the gains, which were expected by banning imports of 101 defence items would be squandered away, as foreign companies establishing their units, would be covered by procurement by the government as a domestic company,” he mentioned within the letter to Modi.

Last month, Defence Minister Rajnath Singh had introduced an formidable plan to ban the import of 101 weapons and platforms by 2024 below a staggered timeline. The transfer is geared toward boosting India’s home defence manufacturing in keeping with the Prime Minister’s ‘Self-Reliant India Mission’. PTI

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