Nirmala Sitharaman assures defence firms over licensing, tax concerns

Defence Minister Nirmala Sitharaman on Saturday issued directions to officials for addressing top military firms' concerns over licensing and tax issues and reiterated the government's commitment to facilitating private sector's participation in defence manufacturing.

Sitharaman discussed various issues relating to implementation of the government's 'Make in India' initiative in the defence sector with representatives of industry chamber Confederation of Indian Industry (CII), including top executives of a number of Indian and foreign defence firms.

The defence minister issued directions to the team of officers headed by the Defence Secretary for time-bound action on key issues raised at the round table, including the resolution of licensing with the Home Ministry, tax-related matters with the Finance Ministry and commercialisation of technologies developed by the Defence Research and Development Organisation (DRDO), the defence ministry said in a statement.

It said a wide range of issues, including matters relating to licensing, taxes and duties and ways to speed up the procurement processes were discussed at the meeting.

Ways to streamline the offsets regime and creation of a tiered defence industrial ecosystem with full integration and skilling of manpower in the Micro, Small and Medium Enterprises sector were also deliberated upon during the meeting.

Sitharaman conveyed to the top executives of the private defence industry that the government was "fully committed" to removing all the stumbling blocks and facilitating private participation in defence manufacturing with the objective of bringing high value foreign investment into the sector, officials said.

She told them that focus of the initiative is to ensure self-reliance in meeting the country's defence needs and that the government will provide a level playing field to the industry.

Sitharaman also asked the officials to ensure timely conclusion of procurement proposals.

In May, the government had unveiled the strategic partnership model under which select private firms will be roped in to build military platforms such as submarines and fighter jets in India in partnership with foreign entities.

"The present government has taken a series of significant policy initiatives, including promulgation of DPP (defence procurement procedure) 2016 which gives highest priority to indigenous design and manufacture of defence equipment, introduction of Strategic Partnership model, liberalisation of FDI norms and providing a level-playing to private industry," the defence ministry said.