JOIN USFinance Minister Nirmala Sitharaman announces reforms in Defence, Space and Atomic Energy
India on Saturday decided to ban the import of certain military items to boost indigenous defence production, hiked the FDI limit in defence and opened up space and atomic energy sectors to private companies in tune with the Centre’s recent push towards self-reliance.
In one of the most significant reforms in the defence sector, the defence ministry for the first time would come out with a negative list of weapons for imports.
The list will have a year-wise timeline so that the military would not face any inconvenience from the immediate need of any weapons.
The import ban would come with indigenization of the spares that are currently imported and a separate provision in the budget to buy military hardware from the domestic manufacturers, Union Finance Minister Nirmala Sitharaman said at a press conference.
Sitharaman also announced hiking the FDI limit in defence manufacturing under automatic route up to 74% from the existing level of 49%. However, its immediate impact is not clear as currently there are provisions even for 100% FDI in the defence sector under special circumstances with approval from the government.
Opening up big-ticket defence manufacturing was one of the aims of the Narendra Modi-led NDA government that wanted to ride on defence manufacturing for large scale job creation.
But arms majors like Boeing, Airbus, Lockheed, Raytheon, Saab and Denel would have to examine the details of the proposal more closely to determine if they can invest more in the Indian market. In the past 19 years, India attracted only a measly FDI of $ 8.8 million (Rs 66 crore) in the defence sector, according to a Defence Ministry response to a query submitted in the Lok Sabha.
The defence procurement process would be made faster because of the establishment of a project management unit and realistic framing of general staff qualitative requirements (tender specifications). Besides, the trial and testing procedures would be overhauled.
However, most of the announcements have barely any link to providing immediate relief to COVID-19 victims and some of the decisions like a private-public partnership in deep space missions are downright bizarre.
“When migrants can’t reach home safely, the Finance Minister is talking of opening up planetary exploration and outer space travel to the private sector. It’s bizarre,” commented Congress leader Jairam Ramesh.
Other announcements in the space sector are allowing private sectors to use ISRO facilities and other assets to improve their capacities besides providing a level playing field for private companies with predictable policy and regulatory environment.
In the atomic energy, private players would now be allowed to partner with the Department of Atomic Energy to make research reactors for the production of medical isotopes.