Indian Military

NEW DELHI: The Indian Air Force on Friday said that its operational capabilities will remain unaffected in case government did not enter into certain military pacts with the US.

"Government had asked us about our opinion on these agreements and we told them that this will not make any substantial difference to our operational capabilities," Naik said at a CII event here.

His remarks come at a time when reports suggest that in absence of the Communication Interoperability and Security Memorandum of Agreement (CISMOA) and the Logistics Support Agreement (LSA), the US would be removing some of the key equipment on board the military systems being supplied to India by it.

India is buying a number of weapon systems from the US including the C-130 J Hercules aircraft, C-17 heavylift aircraft and the ultra-light howitzers through the foreign military sales route.

The US has been pressing India to sign these agreements for developing closer defence ties.

[Stratpost]

The Federation of Indian Chambers of Commerce and Industry (FICCI) has published a paper in response to the solicitation of views by the Department of Industrial Policy and Promotion (DIPP), arguing for conditional increase, if at all, in the limits to investment by foreign players in Indian defense industry beyond the current limit of 26 per cent, to 49 per cent. The DIPP, in its discussion paper, was considering hiking FDI limit up to 74 per cent, and even 100 per cent in some cases.

The Indian Ministry of Commerce allowed the participation of the private sector in the defense industry in May 2001, permitting 100 per cent equity with a maximum of 26 per cent of FDI, subject to licensing. Under the Defense Procurement Procedure (DPP) 2008, limit was raised to 49 per cent FDI on a case-by-case basis. But the Foreign Investment Promotion Board (FIPB) has not, so far, approved the formation of a venture with a 49 per cent FDI component.

FICCI sees little reason to permit FDI above 26 per cent, considering the existing FDI into the Indian defense sector, saying in a statement, “The 26% FDI cap in the defense sector has already attracted top overseas defense OEMs like BAe, EADS, Sikorsky, Lockheed Martin, Electtronica Defence Systems, etc to hugely invest in India’s defense sector.