Ninety-six contracts involving Rs 85,733 crore have been signed with Indian vendors for capital procurement of defence equipment for the armed forces in the last three financial years, the government said on Friday.
In response to a question, minister of state for defence Subhash Bhamre also said that 58 contracts worth Rs 12,1563 crore have been signed with foreign vendors for the acquisition of defence equipment in the same period.
Bhamre said foreign direct investment policy in defence sector has been gradually liberalised in the last two years to encourage defence indigenisation.
"Since defence projects involve long gestation period and investment inflow takes time even after the projects are approved and contracts awarded, there is always a time lag before the impact of FDI is visible," he said.
Bhamre said the defence sector needs significant capital investment and infusion of technology for which foreign investment can play a critical role.
"The FDI in the sector could be the most trusted route to technology transfer which would help in increasing the defence production base and providing the much needed impetus to self-reliance and indigenisation in defence sector," he said.
To a separate question, he said there is no proposal to privatise ordnance factories.