Defense has always been an important sector in India. India surrounds the borders which are among the most militarized areas in the world. In this situation, the defense needs to make a strong hold on India. Several times aspirants were asked recently about Rafale status and some GD topics of FDI in defense and procurement and investment policy of India have been stated. So, here we are having a gist of these few topics.
Many defense weapons have been procured from foreign nations starting from the Independence era and it is still going on. FDI in defense has made the investment much simple.
When it comes to the procurement and purchasing and investing, FDI has played an important role in defense investment. Since taking the PM’s seat, Narendra Modi has eased FDI in defense in order to make defense a favorable place of investment. Recently, the Indian government has relaxed FDI norms in defense and other major sectors. FDI in defense has been relaxed by allowing FDI up to 49% under the automatic route and further is done after approval from FIPG.
According to the Stockholm international peace research institute, India spends nearly $ 24 billion per year on its defense import, making it one among top importer of defense equipments. Currently India avails 49% FDI in the defense sector and 100% in FDI for the projects that involve the state of art technology and need approval form cabinet committee on case to case basis.
Foreign investment has been affected a lot after the policies and steps taken by government past years. TATA and boing have announced to make parts of aircraft jointly in India. Rafale has been in news from a long time. This time also France made jet made a space in media when France’s Safran SA has shown its plans to manufacture for rafale aircraft in India. The move seems to be an outcome of PM Narendra Modi’s visit to France which led to the finalization of rafale deal by singing deal for 36 aircraft over 126 which were previously signed in the deal. The France based company was in talks with HEL for constructing 30,000 sq.m plant for Safaran engines for Dassault’s Rafales. But no reply from HAL was claimed.
Further, the company showed its reluctance in making its components with the Indian defense contractor, Hindustan Aeronautics Limited
Rafale, as per sources, has attracted UAE. United Arab Emirates is on the final verge of clearing Rafale deal with Dassualt. Indian defense minister Manohar parrikar has said that the rafale deal with India is in the final stages and will be cleared soon.
India is eying rafale as a tone third of its planes are older than 40 years and are required to be replaced. This is also the reason behind the manufacturing of Tejas aircrafts and making it a better option over overage aircrafts that India is currently using. Even the air force has also shown reluctance in opting Tejas, and demanded more Rafales. But Indian government rejected the demand, directed them to opt Tejas over extra rafales. As per the sources, India is planning to buy Russian helicopters having Safran engines. The company has been involved in manufacturing Airbus and some boing jets. Indian, if goes in same pace will likely join the super powers in defense strength.
