US companies can profit from eased FDI guidelines: Rajnath

Tribune News Service

New Delhi, October 27

After a series of reforms in the defence manufacturing sector, India on Tuesday laid out how US companies could take advantage of policy changes to bring production lines and even complete export orders.

After the 2+2 dialogue between India and the US, Defence Minister Rajnath Singh said: “We have conveyed to the Secretaries (Mike Pompeo and Mark T Esper) about creating an eco-system for defence industry through partnership and investment.”

Replying to a question, he said: “India offers opportunity of shifting production and global supply chains in the wake of disruptions due to the pandemic. We have invited the US companies to invest in India and take advantage of the 74 per cent FDI under the automatic route or even a larger equity with government approval.”

“India has a substantial requirement which can sustain investment for years. We have explained how the reforms in acquisition policy enhance incentive for investment in Indian defence industry,” Rajnath said. India also explained to the US delegation that production and assembly lines could be used for exports of goods and services to Asia. Also, the US-made equipment operating in Asia could be maintained at facilities in India.

“We hope our message is carried back to the US Government and industry,” the Defence Minister said.

A joint statement said “ministers decided to work together to realise the development of their respective defense industries”.

The two sides stated their intention of fast-tracking projects under the existing framework of the Defence Technology and Trade Initiative (DTTI).

India looks forward to the participation by the US Government and defence industry at the upcoming Aero-India in February 2021.

Recognising the importance of cooperation in defence innovation, the ministers welcomed the inaugural meeting between the Indian Defence Innovation Organisation (DIO-iDEX) and the US Defence Innovation Unit (DIU) in July this year.

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