Published On: Thu, Mar 3rd, 2016

Harness FDI

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Our roadmap is to
expand our footprint and bring
production line in India to
produce a complete helicopter
in the near future.



Given the need for an aggressive policy towards development, modernization and employment, India’s defence industry welcomes the FDI increase from 26 to 49 percent by the newly elected government. This opens up a gamut of opportunities including a possible increase in domestic manufacturing in the sector. The industry is optimistic that the government will invigorate a sense of life into a seemingly placid scenario.
With the liberalisation of the existing FDI regime, we are hopeful to reach a stage in which the Indian private industry could channelize its energies to indigenise defence production. India should aspire to be seen as a regional hub for global outsourcing of Defence equipment owing to its geo-political location. This will not only enable economies of scale but also considerably decrease India’s procurement rates.
FDI has immense potential to enable India’s desire to be self-sufficient in Defence production, by producing high tech systems in collaboration with foreign firms in India.
We are looking forward to a higher increase going forward that could result in increased capital inflow, capability development, build human resources talent, establish stronger manufacturing base in the country and help transfer high end technology to make the country self-reliant and establish a modern and self-sustained ecosystem. A higher FDI limit would provide opportunities to further contribute in the advancement of India’s defence sector by offering world-class innovative products and also explore strong partnerships with public and private sector enterprises that share similar synergies to work towards indigenization. In 2010, DIPP had suggested pegging FDI cap at 74 percent; this time around the proposal seems to be to allow even 100 percent FDI if it brings in state-of-art technologies.
The Indian Armed Forces are currently in midst of a great modernisation plan which would cater for the hardware required by the forces for the next 15-20 years. Increase in FDI would enable and assist the Indian industry to form alliances to meet these emerging requirements and lay the foundation of a strong and focused defence industry in the country.
We, at Sikorsky are excited about tapping into India’s skilled aerospace industry and capability. With our recent joint venture with the Tata group, we have produced cabins for the S-92® helicopters and have become 100% indigenous. Our roadmap is to expand our footprint and bring production line in India to produce a complete helicopter in the near future. In terms of Indo-US defence collaboration, US sees immense potential in India and intends to bridge the existing gap by establishing modern manufacturing and business processes, and transferring high-end technological skills. With the new government initiating forward looking policy initiatives, there will be much more scope for greater collaboration and participation between the two countries.

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