The Swadeshi Jagran Manch has written to Prime Minister Narendra Modi asking him not to allow foreign defence companies to register themselves as Indian vendors by setting up subsidiary companies in India as it would be in contravention of the government’s thrust on self reliance.
An affiliate of the RSS, the Swadeshi Jagran Manch has pointed out that with the change in investment policy allowing FDI up to 74% under automatic route in defence production, the definition of Indian vendor has been diluted significantly
“Swadeshi Jagran Manch is of the thought to be opinion that ‘Indian vendor’ must only intent an entity in which majority ownership and keep an eye on is retained by Indian Resident Citizens. Diluting the definition of ‘Indian vendor’ will be a lethal blow to Indian Defence Industry,” the letter signed by the national co-convenor of the SJM, Ashwani Mahajan said.
It would cause a severe blow to the existence of the domestic defence industry, both big and small which has developed indigenously, as foreign companies would start getting same remedy, which domestic industry gets particularly under ‘Buy IDDM (Indian Indigenously Designed Developed and Manufactured)’ categories where special preferences are provided to the ‘Indian Vendor’, the letter said.
The SJM which has been in the leading edge of seeking a rejig of business and investment policies and boycott of Chinese products has said that whether a foreign company is registered in India, and has started making in India, its technology policy isn’t governed by Indian laws, they’re governed by the laws of country of their origin.
“…All of the gains, that have been expected by banning of imports of 101 defence items would be squandered absent, as foreign companies establishing their units, would be covered by procurement by the government as a domestic company,” the letter said.
In August India announced that it is going to ban the import of 101 types of weapons and ammunition over the next five years — from artillery guns to light military transport aircraft and conventional submarines to long-range land attack cruise missiles — in a remarkable step on the long street towards achieving self-reliance in the defence sector.
Mahajan underlined that procurement from companies registered in India, where majority shareholding is that of foreigners, is no different from imports, as they would be either importing their components from foreign destinations or would be contracting with companies of their choice, with little chance of developing domestic capabilities.
“We keep in mind that the mean of the Government, so far has been that first preference be provided to Indian IDDM, that is, Buy Indian IDDM. Due to this fact, by any chance companies registered in India but owned by foreigners, shouldn’t be included in this category. Second preference in government procurement must be to Indian companies, namely companies having Indian shareholding of 51 per cent or above. Alternatively, whether ‘clarification’ is to be believed, in both these categories, foreigners will gain dominance and ‘Self Reliance’ in defence will be a distant dream,” the letter said.