100% FDI in Defence is a Great Opportunity for Indian MSMEs

India in a recent interaction with US corporate sector at the US India Strategic Partnership Forum reiterated that it is open to 100 per cent FDI in defence as long as firms are willing to provide tech transfer. The Micro, Small and Medium Enterprises (MSMEs) in the defence sector expect that this might lead to fresh flow of technology.

The main challenge at present with regards to Manufacturing MSMEs operating in the defence sector is about lack of latest adoption and integration of latest technology in the manufacturing processes as compared to other parts of the world. Indian policymakers and industry must resolve this challenge.

P.C Tripathi, President Defence and Strategic Industries Association of India (DISA) said in a media interaction that with the government putting in efforts towards inviting foreign technology, the MSME sector is likely to benefit in the long run.

“The foreign private players have the latest cutting edge technology, which if comes to India, MSMEs that become the part of the manufacturing and supply chain get to upgrade themselves,” Tripathi said.

Tripathi made the comments responding to the reports of India batting for FDI in at the USISPF in which Ashok Gupta India’s Secretary of Defence Production said that India is open to 100 per cent foreign direct investment (FDI) in defence if firms are willing to provide full technology transfer.

The USISPF meeting witnessed leading US corporates in the field including Boeing, Lockheed Martin, BAE systems, Honeywell and AECOM.

He further informed that the prime reason for inviting private firms from other countries is itself because of not very up to date technology in the country.

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