FDI in Defence Sector – Introduction of FDI in the defence sector

FDI in Defence Sector

The Government vide Press Note 7 of 2014 Series dated 26.08.2014 has notified revised FDI Policy in defence Sector, according to which FDI upto 49% is allowed in the sector through Government route and above 49% through approval of Cabinet Committee on Security (CCS) on case-to-case basis, wherever it is likely to result in access to modern and state-of-the-art technology in the country. Further, FDI in Defence Sector is subject to obtaining Industrial Licence under the IDR Act, 1951.

The introduction of FDI in the defence sector will not pose any threat as some of the major conditions governing Licensing in Defence Sector are as follows:

(a) The management of the company / partnership firm owning the Industrial Licence should be in Indian hands with majority representation on the Board as well as the Chief Executive of the Company / partnership firm being Resident Indians. This condition is, however, not applicable to cases of foreign investment above 49%.

(b) Adequate safety and security procedures would need to be put in place by the licensee. The Indian Licensed Defence Companies (ILDC) shall comply with the security guidelines applicable to them as per security instructions / architectures prescribed in “Security Manual for Licence Defence Industries” available at www.ddpmod.gov.in based on their categorization. Some of the important guidelines of the Security Manual includes External Security Audit of the ILDCs by Intelligence Agencies once in two years and Cyber Security Audit by CERT-IN empanelled Auditors once every year.

(c) The licensable defence items as mentioned in the license, produced by the private manufacturers will be primarily sold to the Ministry of Defence. These items may also be sold to other Government entities under the control of the Ministry of Home Affairs, State Governments, Public Sector Undertakings (PSUs) and other valid Defence Licensed Companies without prior approval of Department of Defence Production (DDP). However, for sale of the items to any other entity, the licensee shall take prior permission from DDP, Ministry of Defence.

This information was given by Minister of State for Defence Shri Rao Inderjit Singh in a written reply to Shri Naresh Agrawal in Rajya Sabha today.

AIRF General Secretary writes to PM about stopping 100% FDI and Privatization in Railways

AIRF General Secretary writes to PM about stopping 100% FDI and Privatization in Railways.

The letter is reproduced and given below for ready reference for our blog viewers…

Com. Shiva Gopal Mishra writes Hon’ble Prime Minister Sh. Narendra Modi about stopping 100% FDI and Privatization in Railways

Respected Shri Narendra Modi Ji,

During recent past, Railwaymen had been feeling highly demoralized and disgusted on account of apprehensions of privatization of the Indian Railways owing to 100% Foreign Direct Investment(FDI) and constitution of a High Level Railway Restructuring Committee for Restructuring of Ministry of Railways(Railway Board). Yesterday, on 25th December, 2014, while celebrating the 91st Birth Anniversary of Hon’ble Shri Atal Bihari Vajpayee as “Sushasan Diwas” in Diesel Locomotive Workshop, Varanasi, you publically announced that there would be no privatization of the Indian Railways, rather number of Railway employees shall be increased during the time to come, for which, we, on behalf of around 13 lakh Railway employees, express our heartily thanks for giving this assurance.

Sir, though the assurance given by you that the Indian Railways shall not be privatized, has provided some relief to the Railwyamen, who were feeling hurt and discouraged for the last six months, at the same time you have mentioned that FDI is essentially required in the Indian Railways, still creates some confusion. Although, there have been constructive discussions with the Hon’ble MR, which we hope, shall continue in future also.
AIRF has always supported and contributed a lot in the development and modernization of the Indian Railways through transparent process, as such, we would urge further assurance, so that the moral of lakhs of Railwaymen is kept high. Your goodself very-well know that there has been all round development in the Indian Railways after the Independence, and not only the Indian Railways have expanded a lot, but also have touched new horizons by adopting latest technology in different spheres, by virtue of which, Indian Railways are now running over 19,000 pairs of trains per day transporting more than 20 million passengers and around 35 lakh tonne freight everyday. Obviously, there has been dedicated contribution of the Railwaymen in this endeavour, not only this, but also the dedication of the Railwaymen can be adjudged from the fact that, while performing their duties, they even sacrifice their lives, and it has been established that hundreds of Railway staff loose their lives every year, as endorsed by the High Powered Committee, headed by Dr. Anil Kakodkar, in it’s report.

We, therefore, once again request you that, with a view to boosting morale of the Railwaymen, there should be clear and specific assurance by the government that the Indian Railways shall in no way be privatized, so that the staff shall be motivated to perform their duties with even more dedication and sincerity.

Wishing you very-very Happy New Year on behalf of all the Railwaymen and their family members!

With kind regards!

Yours Sincerely,
sd/-
(Shiva Gopal Sharma)
General Secretary

Shri Narendra Modi Ji,
Hon’ble Prime Minister,
Government of India,
New Delhi

Copy to: Hon’ble MR(Government of India), Ministry of Railways, Rail Bhawan, New Delhi.
Copy to: Hon’ble MoSR(Government of India), Ministry of Railways, Rail Bhawan, New Delhi.
Copy to: GSs, all affiliated unions – for information.