The Govt. is planning guidelines for defence
sector joint ventures (JVs) between Indian and foreign firms. And these will be
similar to foreign direct investment (FDI) norms for defence collaborations in
certain developed countries.
The idea is to institute security and auditing
procedures for JVs and their supply chains. The norms will apply to JVs based on
‘threat perception’ and the sensitivity of products to be manufactured. Such JVs
will have to seek prior separate security clearances from the home ministry
regarding subsidiaries, directors and foreign nationals (if engaged).
The JV companies must be owned and controlled by
Indian residents and their companies. Despite the 26% FDI cap, the defence
sector has attracted top overseas defence equipment manufacturers like the UK’s
BAE, European consortium EADS, US-based Sikorsky and Lockheed Martin,etc.
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