FROM THE EDITOR’S DESK
In the past two years, the Narendra Modi-led government has been trying to change the course of the nation, having come to power on the plank of development. There have been major announcements in these two years, but June 2016 will remain a watershed month for the NDA Government as in one masterstroke it has announced 100 per cent foreign direct investment (FDI) in defence and aviation and higher percentage in several other sectors. This has been hailed as the most radical and transformational reforms that Indian liberal economy has seen in many years. The liberalisation in FDI in defence and aviation will enable foreign companies to invest in India and also to bring in modern technologies for our use which is the need of the hour for India.
Till now, the FDI regime permitted 49 per cent FDI participation in the equity of a company under automatic route. Foreign investment beyond 49 per cent has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded. The condition of access to state-of-the-art technology in the country has been done away with. FDI limit for defence sector has also been made applicable to manufacturing of small arms and ammunitions covered under the Arms Act of 1959.
Lt General P.C. Katoch (Retd) in his viewpoint has called this as a bold decision that would certainly give the required fillip to ‘Make in India’ as well as boost defence exports. What needs to be ensured is that while the Defence Procurement Procedure (DPP) 2016 is implemented in true letter and spirit, cases of FDI in defence ‘through the government’ route are also processed speedily – cutting out the red tape in both cases. The Indian military’s current equipment holdings are 50 per cent obsolete and multiple critical voids exist because of sustained neglect over the past decade plus. The proportion of state-of-the-art equipment also needs to grow from its current level of 15 per cent to at least 30 per cent with the current cycle including acquisitions drafted under the Long-Term Integrated Perspective Plan, which is expected to include procurements worth $100 billion by 2022. A holistic approach to equipping the military is the need of the hour.
In another article Lt General Katoch (Retd) discusses India’s bid to enter the Nuclear Suppliers Group (NSG). He opines that whether NSG members want to admit Pakistan into NSG or MTCR members grant membership to China, China would be acutely aware the continued blockading of Indian membership to NSG may not be in the best interest of China herself where India is poised on the very cusp of such membership with total US backing.
This month indeed has been historic. History was scripted for the Indian Air Force (IAF) when three women were formally commissioned as fighter pilots. It is seen as the proverbial ‘feather in the cap’ of the service. The three women pilots are Flying Officer Bhavana Kanth, Flying Officer Avani Chaturvedi and Flying Officer Mohana Singh. While we say hats off to these brave young women, it is acknowledged that the IAF is truly on course as a modern air force for the world to take notice. These articles and more in this edition.
Jayant Baranwal Publisher & Editor-in-Chief