FDI hike in defence to boost production: HAL

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SME Times News Bureau | 02 Jun, 2014
Prospects of an increase in foreign direct investment (FDI) in the defence sector would enhance production and generate employment, Hindustan Aeronautics Ltd chairman R.K. Tyagi said Saturday.

"With the possibility of increase in FDI limit in defence sector, production activity will get a boost in India," he said at a vendors meet in Banglore.

Though 26 percent FDI is allowed in the protective defence sector and 49 percent on merit, the new NDA government could increase this to 74-100 percent in a case-by-case basis so as to revive the ailing manufacturing sector, lower the quantum of defence imports and generate jobs in thousands.

According to reports, the union commerce ministry Thursday circulated a 15-page cabinet note with a road map to increase FDI in defence on case-to-case basis to 49 percent, 74 percent with technology transfer and 100 percent for modernising production.

"We will need your aggressive participation in the event of the FDI limit going up," Tyagi told about 100 vendors from across the country and overseas at the state-run defence behemoth's third global vendors meet here.

The day-long annual meet deliberated on various issues related to supply chain and e-business.

"You should to take advantage of our IT-enabled services and ensure transparency in all business dealings," Tyagi told the vendors.

"We have also initiated project 'Parivartan', a comprehensive programme to review processes and help us to take key decisions swiftly using IT," he added.

The USD 2 billion aerospace major also updated vendors on its programmes and business potential, procurement procedures, supplier relationship management (SRM) and supplier relationship improvement (SRI).

HAL director (finance) A.K. Mishra called upon the vendors on the occasion to partner with the defence company for effective supply chain that would enable it to execute projects on schedule and delivery them in time.