Indian Military

New Delhi – The dismal state of the Indian Army’s modernisation drive has become a serious setback as India’s homeland security is getting compromised in the process. There are a host of areas where the Indian Army’s capability has been questioned, especially in view of the neighbouring countries gaining more momentum in mobilising their military equipment.

The Indian Army needs to take critical steps to ensure its capability in areas like air defence, artillery and aviation in the current geo-political scenario. While a large number of procurements are still stuck in various stages of approval and acquisition, it has been noted that roughly 15 years will be needed to achieve maximum operational readiness.

Experts feel that the Indian Defence Ministry’s Army acquisitions wing needs additional manpower and a better organisational structure to handle more projects than it does. Besides eradicating bureaucratic hurdles and lengthy procedures, there is a dire need to restructure the Defence Ministry’s land systems acquisitions wing to fast-track inductions.

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.