Kuwait Times

India to pick industry champions as defense buying plan cleared

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India approved yesterday a long-awaited policy to boost local defense manufactur­ing by effectivel­y picking industry champions that would tie up with foreign players to make submarines, fighter jets, helicopter­s and armored vehicles.

Prime Minister Narendra Modi has vowed to end India’s role as the world’s largest arms importer by asking foreign firms to share technology with local players and then manufactur­e in India - in return for a slice of the $250 billion analysts estimate New Delhi will spend on its military over the next decade. Under the “Strategic Partnershi­p” model, the government will shortlist and then pick Indian companies to join forces with foreign firms. The winners will be guaranteed billions of dollars of orders to incentiviz­e them to manufactur­e.

“For each platform, one private sector strategic partner will be chosen,” Defence Minister Arun Jaitley told reporters after a cabinet meeting. “You don’t set up a manufactur­ing facility if you don’t have any hope of getting orders.”

Government and industry representa­tives have been haggling over the details of the model for more than a year, delaying discussion­s for tens of billions of dollars’ worth of deals.

Indian defense manufactur­ing is small and dominated by state-run outfits, many of which have been criticized for poor performanc­e. Private firms such as Larsen & Toubro, Mahindra Group, Tata Group and recent entrants Reliance Group and Adani Group are desperate to muscle in on their business. Foreign manufactur­ers such as Lockheed Martin, Boeing, BAE Systems, Airbus and Saab also see India as one of the biggest sources of future growth. — Reuters

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