Raise private sector participation in defence technology development
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A policy framework is required to enable participation of the private sector in defence technology development and transparency should be maintained through online tendering, defence experts said Friday.

"Policy framework is required to push private sector for defence technology development, as large industrial houses have remained idle despite licenses. After all it is the private sector that pushed the country's economy," Brigadier (retd.) Rahul Bhonsle said at the launch of the book, "Decoding India's defence procurement" at the Vivekananda International Foundation here.

The involvement of the private sector would lead to huge job creating opportunities, he said.

Satish Kaura, chairman and managing director of Samtel Group, said the government needs to improve its dialogue with private players.

"The dialogue between government and private sector is not as good as it should be. Intense discussion between the two parties is required in the matter," he said.

Former chief of army staff N.C. Vij added that FDI cap in defence procurement should be raised to 75 percent in "exceptional" cases.

"The DPP (Defence Procurement Procedure) 2013 had recommended FDI (foreign direct investment) only upto 25 percent. We are glad that the present (National Democratic Alliance) government has increased it to 49 percent. In exceptional cases 75 percent FDI should be allowed but there should be a regulatory body to ensure genuine transfer of technology is taking place," he said.

Vij made a strong case for maintaining transparency.

"There should be measures including e-procurement, online tendering and e-auction," he suggested.

He further said that cancellation of defence deals midway in the wake of corruption charges is "counter-productive".

"Blacklisting the erring companies or cancelling the deals after they had been nearly negotiated works against our interest. It also leads to international parties losing faith in India. The companies should be heavily fined instead," he said.

Published in Business Standard 12th September 2014

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