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Private sector participation in Indian defense production on rise

IRNA - Islamic Republic News Agency

New Delhi, Feb 7, IRNA -- India`s Minister of State for Defense Chaman
Lal Gupta on Friday evening said, that with the growth of public 
sector (PSUs) in Defense Production, a large number of industrial 
units in the Private Sector also have grown with varied scales of 
operation, which are involved in outsourcing raw materials, 
components, sub-systems/assemblies and sub-assemblies to ordnance 
factories and Defense PSUs. 
According to a press release of Confederation of Indian 
Industries, a copy of which was received by IRNA on Saturday, Chaman 
Lal Gupta while delivering a keynote address at the 2nd India Defense 
Industry Summit organized on the occasion of Third Defense Exposition 
2004, said during the year 2002-03, Defense PSUs outsourced to the 
extent of more than 30 percent whereas in case of ordnance factories, 
it was about 80 percent. 
Gupta while speaking at the seminar organized by the Confederation
of Indian Industry (CII) in association with India`s Ministry of 
Defense at Pragati Maidan said, that the defence industry was highly 
capital intensive and it was characterized by high technological 
obsolescence. 
The Minister remarked "to achieve self-reliance in the crucial 
sector of defence production, Government deems it necessary that 
all technical and managerial resources available in the country, both 
in the public and in the private sector be synergised, particularly 
in a situation when our private sector has demonstrated its 
capabilities in various defense related fields." 
He said that FDI was now recognized as an important stimulant of 
growth in the country. According to Prof Gupta, the Government was 
making all efforts to attract and facilitate FDI and investment by 
Non Resident Indians and Overseas Corporate Bodies (OCBs), that are 
predominantly owned by them. 
"The basic objective to allow FDI in defense sector is mainly to 
pool capital and to induct latest technology to manufacture state-of- 
art defense equipment to meet out the requirements of our Armed 
Forces and also to enter into export market at a significant scale." 
Speaking on the occasion, General Shankar Roy Chowdhury, PVSM, 
ADC (Retd), Member of Parliament and Former Chief of Army Staff, 
also said, "India having reached a certain take-off stage for 
growth, the main issue before the industry now was synergy - synergy 
with the Government and private sector," he commented. 
Earlier, in his welcome remarks, Atul Kirloskar, Chairman, CII 
National Committee on Defense, said that there are two areas of 
outsourcing in defense - outsourcing of components/ sub-components/ 
sub-systems by the defence production agencies thereby enhancing 
production capabilities and second, outsourcing of services by the 
defense forces. 
2160/212 
End