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Min­istry of Com­merce ‘Fa­cil­i­ta­tor’ of ‘Make in In­dia’ Ini­tia­tives

The Naren­dra Modi-led Gov­ern­ment is go­ing ag­gres­sive on sev­eral ini­tia­tives and top of them all is the ‘Make in In­dia’ plan. All the min­istries are work­ing in that di­rec­tion, more so the Min­istry of Com­merce and In­dus­try which is key to the push that is re­quired for not just self-re­liance in sev­eral sec­tors but also to give it an ex­port mo­men­tum. In re­sponse to ques­tions from Jayant Baran­wal, Edi­tor-in-Chief of SP’s Land

Forces, the ‘Make in In­dia’/In­vest In­dia team at the re­spec­tive of­fices, on be­half of the Min­is­ter of Com­merce and In­dus­try, Nir­mala Sithara­man, has out­lined the ‘Make in In­dia’ plans in the aerospace and de­fence sec­tors, the sec­tors that are go­ing to give a mas­sive thrust to devel­op­ment. The team on be­half of the Min­is­ter has re­sponded to SP’s spe­cific ques­tions. Ex­cerpts:

SP’s Land Forces (SP’s): When you say ‘Make in In­dia’ what ex­actly is the des­ti­na­tion – (a) to get for­eign OEMs to man­u­fac­ture the mil­i­tary plat­forms in In­dia for In­dian mar­ket and (b) to get for­eign OEMs to man­u­fac­ture for the overseas mar­kets? Min­istry:

The main ob­jec­tive of the ‘Make in In­dia’ cam­paign is to trans­form In­dia into a global de­sign and man­u­fac­tur­ing hub. The prod­ucts man­u­fac­tured in In­dia can be used for do­mes­tic con­sump­tion and can be ex­ported as well.

SP’s: What all in­cen­tives the for­eign OEMs are sup­posed to get un­der the cam­paign? Min­istry:

As per the ex­tant De­fence Pro­cure­ment Pro­ce­dure 2013, for­eign di­rect in­vest­ment (FDI) in joint ven­tures with In­dian en­ter­prises is con­sid­ered as an el­i­gi­ble av­enue for dis­charge of off­set obli­ga­tions in In­dia.

SP’s: In view of creat­ing a solid In­di­a­based in­dus­trial com­plex, what all steps are be­ing taken? Min­istry:

The gov­ern­ment has taken the fol­low­ing ini­tia­tives in or­der to build an in­dige­nous de­fence man­u­fac­tur­ing base in In­dia:

Lib­er­al­i­sa­tion of FDI cap in de­fence

man­u­fac­tur­ing. FDI up to 49 per cent is al­lowed un­der the au­to­matic route. FDI be­yond 49 per cent is al­lowed un­der gov­ern­ment route on a case to case ba­sis, which is likely to re­sult in ac­cess to mod­ern and state-of-the-art tech­nol­ogy in the coun­try. Is­sue of list of equip­ment re­quir­ing an in­dus­trial li­cence and lib­er­al­is­ing reg­u­la­tions. The de­tailed list can be ac­cessed from the link pasted (http://dipp.nic. in/ English/ acts_ rules/ Press_ Notes/ pn3_2014.pdf) Fi­nal­i­sa­tion of se­cu­rity man­ual for li­censed de­fence in­dus­try? The se­cu­rity man­ual can be ac­cessed from the link pasted (http://ddp­mod.gov.in/show­file. php?lid=151) In­crease in ini­tial va­lid­ity of in­dus­trial li­cence? The ini­tial va­lid­ity of in­dus­trial li­cence has been ex­tended to 15 years, which is fur­ther ex­tend­able up to 18 years for ex­ist­ing as well as fu­ture li­cences. No­ti­fied strat­egy for ex­port of de­fence prod­ucts? The de­tailed strat­egy can be ac­cessed from the link pasted (http:// ddp­mod.gov.in/show­file.php?lid=174) No­ti­fied list of mil­i­tary stores re­quir­ing No Ob­jec­tion Cer­tifi­cate from Depart­ment of De­fence Pro­duc­tion? The de­tailed list can be ac­cessed from the link pasted (http://dgft.gov.in/exim/2000/ NOT/NOT13/not11513.pdf)

SP’s: Will the tech­nolo­gies be bor­rowed/ pur­chased from overseas? Min­istry:

Yes, the tech­nolo­gies will be trans­ferred by the for­eign com­pa­nies.

SP’s: Will the route of trans­fer of tech­nol­ogy (ToT) be used to en­able fast es­tab­lish­ment of in­dus­tries of­fer­ing in­stant de­liv­ery pos­si­bil­i­ties? Min­istry:

No, trans­fer of tech­nol­ogy will only en­able the for­eign com­pa­nies to get more in­cen­tives. It will not en­able faster es­tab­lish­ment of such in­dus­tries.

SP’s: Re­search & devel­op­ment – it has been con­fined to DRDO (De­fence Re­search and Devel­op­ment Or­gan­i­sa­tion), in our coun­try so far. What all is be­ing done to ex­pand the num­ber of play­ers in In­dia? Min­istry:

The gov­ern­ment is con­sid­er­ing pro­vid­ing in­cen­tives for un­der­tak­ing R&D ac­tiv­i­ties in In­dia. As per the in­for­ma­tion avail­able in pub­lic do­main, the gov­ern­ment is con­sid­er­ing to fund pri­vate R&D for build­ing a de­fence tech­nol­ogy base in the coun­try for which var­i­ous norms will be stip­u­lated in the De­fence Pro­cure­ment Pro­ce­dure 2016. More­over, the first bud­get of the cur­rent gov­ern­ment had also pro­vided for creat­ing a `100-crore tech­nol­ogy devel­op­ment fund to pro­vide re­sources to pub­lic and pri­vate sec­tor com­pa­nies to sup­port re­search and devel­op­ment (R&D) of de­fence sys­tems.

SP’s: Will the gov­ern­ment be fund­ing any pro­grammes in case pri­vate sec­tor com­pa­nies are will­ing to work on devel­op­ment of cer­tain mil­i­tary pro­grammes? Min­istry:

Yes. The fund is be­ing cre­ated to sup­port com­pa­nies to in­vest in R&D.

SP’s: How about stronger ac­count­abil­ity within DRDO en­sur­ing that there is less wastage of pub­lic monies, while the re­sults do not re­ally align with those di­men­sions? Min­istry:

The gov­ern­ment is tak­ing steps to im­prove the per­for­mance of DRDO to trans­form the or­gan­i­sa­tion into a hub for de­fence man­u­fac­tur­ing.

FOR­EIGN DI­RECT IN­VEST­MENT (FDI) SP’s: As cur­rent level is 49 per cent (raised from 26 to 49), which kind of pro­grammes may still at­tract be­yond the limit of 49 per cent? Min­istry:

As per the FDI pol­icy, now FDI be­yond 49 per cent is al­lowed un­der ap­proval route in cases which re­sult in ac­cess to mod­ern and state-of-the-art tech­nol­ogy in the coun­try.

SP’s: What has been the to­tal of FDI till now as a re­sult of the re­ferred raise? Min­istry:

As per the sta­tis­tics pub­lished on DIPP (Depart­ment of In­dus­trial Pol­icy and Pro­mo­tion) web­site, de­fence sec­tor has man­aged to re­ceived FDI amount­ing to `0.48 crore be­tween Septem­ber 2014 to De­cem­ber 2015 (i.e the time since the FDI cap was in­creased from 26 to 49 per cent).

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