CII moots natl def manufacturing commission under PMO -Governance Now

CII moots natl def manufacturing commission under PMO

NDMC will boost capability of the country's private sector

PTI | April 2, 2012

With a spending of up to 100 billion dollars projected for modernisation of Armed forces, Industry body CII on Monday mooted a National Defence Manufacturing Commission (NDMC) under the Prime Minister's Office to boost capability of the country's private sector.

The Confederation of Indian Industry (CII) also wanted 49 per cent Foreign Direct Investment(FDI) in Defence production to be allowed on a case-to-case basis, observing that India is poised to become "world's most lucrative market" for military products. The current cap is 26 per cent.

Releasing a report on defence manufacturing sector in India, it recommended access to critical technologies under Transfer of Technology (ToT) agreement.

"With several large equipment and modernisation programmes in pipeline, analysts are projecting a spending of USD 80-100 billion in next five years... A National Defence Manufacturing Commission (NDMC) should be set up under PMO to build capability of private sector," said Ajai Chowdhary, Chairman of CII's National Defence Council.

Chowdhary also said, "The current cap of 26 per cent on FDI in defence production needs to be relaxed to 49 per cent to ensure adequate participation of interested parties on case-to-case basis."

CII demanded creation of an "innovation fund" of Rs 1,000 crore for Small and Medium Enterprises in defence sector.

"Government should enforce 'Make or Buy' and 'Make' (Indian) classification for all flagship defence contracts and mandate that prime contractor be an Indian entity," Chowdhary said, adding that joint ventures should be promoted to ensure that technological gap in the private sector are overcome.

"NDMC besides ensuring progressive increase of domestic procurement from 30 per cent to 75 per cent in next 10 years, should also ensure that eight to 10 largest weapons programmes in the country have a targeted large percentage of locally manufactured content," he said.

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