Centre to allow FDI in arms manufacture

As part of the “Make In India” initiative, the Centre is now planning to open up arms and ammunition manufacturing sector, dominated by government ordinance factories, to foreign investors.

A Ministry of Home Affairs (MHA) proposal suggested that the opening up the manufacturing of arms and ammunition sector is also important to encourage foreign firms to transfer state of the art technology and set up their plants in India.

At present, state run ordinance factories have monopoly over manufacturing of arms and ammunition in the country and private participation is very insignificant. Ordinance factories, however, are unable to meet the demand of arms due to its production constrains.

The latest proposal, which is in the process of being vetted by Department of Industrial Promotion and Policy (DIPP), also stated that by bringing FDI in the sector through Make in India initiatives, the country should eye for positioning itself as global leader in arms and ammunition manufacturing world.

To pave the way for the proposal, the MHA is seeking to change the 56-year-old Arms Act. The Arms Amendment Bill, will also streamline the system of getting arms licences. The MHA proposal says allowing foreign firms to set up plants on technology transfer basis will not only help armed forces, paramilitary and police to acquire latest weapons but also help to create jobs in the country.

As per plan, modernising existing ordinance factories by installing latest technology, producing arms and ammunition for local and global market, allowing private sector to produce arms and permit them to export the products.

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