A day after some Indian companies spoke out against 100 per cent foreign direct investment (FDI) in the defence sector, the Confederation of Indian Industry (CII) and BSE-listed Pipavav Defence have endorsed the Modi government's reported move to allow it.
CII said FDI was directly linked with core national priorities such as raising manufacturing growth to 25 per cent of the gross domestic product, significant job creation and bringing high-end technology into the country. The associated benefits are the spinoffs for the civilian market. "Opening various sectors have helped Indian industry grow and become globally competitive," said Ajay Shriram, president, CII.
On Monday, L&T said 100 per cent FDI should not be allowed in India unless backed by transfer of technology and giving access to Indian companies in foreign markets. Tata, Reliance and Mahindra were non-committal on allowing 100 per cent FDI in the sector.
"We welcome 100 per cent FDI in defence as it will help India to get crucial technology to build our own capabilities," said Nikhil Gandhi, chairman of Pipavav Defence. Pipavav has invested Rs 8,000 crore to set up a state-of-the-art shipyard in Gujarat to construct ships for Indian navy and coast guard.