Indians For Guns

Foreign companies need to be incentivised to set up defence manufacturing bases in India: Arun Jaitley
By Kirtika Suneja

TOKYO: Finance and defence minister Arun Jaitley said foreign companies need to be incentivised to set up defence manufacturing bases in India, adding that policies have to be in sync with reality. Companies, he added, will establish manufacturing units only if there is a likelihood that they will get business.

The government has liberalised rules as far as investment is concerned and Indian companies, both in the public sector and the private sector, have already started entering into arrangements with international firms to establish manufacturing facilities in India, even "outside FDI limits".

"In the context of defence, government is the only buyer and, therefore, people will establish units only if there is a likelihood of them getting business and, therefore, our policies have to be tuned to this reality," he said in an interview. "Our policies have to be tuned so that we are able to incentivise people (so) that it is worthwhile to set up manufacturing bases in India... Some discussions are on," he added, without disclosing details.

His statement assumes significance as defence ministry is set to decide on strategic partners in the private sector for equipment soon.

Jaitley, who met the Japanese defence minister on Monday, said Tokyo is looking at business-to-business ties and is keen to make in India. "They would like to be considered both for the purposes of India buying and any possibility of India domestically manufacturing with their technologies," he said.