May - 2013 ISSUE

Force Magazine

FDI Ceiling of Minimum 74 Per Cent Would Incentivise Global High-Tech Companies to Bring in Latest Products to India

President and managing director, Textron India Pvt Ltd, Inderjit Sial

President and managing director, Textron India Pvt Ltd, Inderjit SialThe foreign direct investment (FDI) issue is once again in the news. As a global OEM, how much do you think the FDI in the Indian defence sector should be increased to? What approach the Indian government should take in achieving it?
As you aware, defence R&D is highly capital intensive and the process of development stretches over several years. The foreign Original Equipment Manufacturers (OEMs), who have invested large sums over the years in developing cutting-edge technology, can only offer this to India or another country when adequate return on investment is assured. Hence, high technology companies look forward to greater equity holding in international business collaborations. FDI ceiling of minimum 74 per cent would incentivise global high-tech companies to bring in latest products to India. The matter has been under consideration of government of India for a long time and we anticipate a gradual easing of the ceiling.

How does an OEM benefit from such an increase in FDI?
Higher ceiling of FDI would translate into higher return on the investment made during the development phase of the technology being offered. This would, therefore, be an appropriate business case for the OEMs.

In your perception, how will the indigenous defence industry benefit from this?
The benefits for the indigenous defence industry will be manifold and will include skill development; technology upgradation; improvement in methods, processes and project management; best practices; quality standards and several other. Most importantly, it will lead to greater access to international markets.

What are your ongoing programmes in India, apart from the sensor fuzed weapons, which is nearing completion?
I wish to convey that Textron has three-fold objectives in India and it is not oriented only to sales. We have developed an excellent captive engineering centre at Bengaluru engaged in all our current manufacturing programmes. We shall continue to develop this centre both in terms of head count as well as skill level. We are also engaged, in a big way, to source helicopter, engine and SFW components from Indian industry. We aim to develop our Indian partners in a significant way for long term supply chain management. We gave several programmes under discussion with Indian military, ministry of home affairs and also Indian industry members. Our objective is to develop a holistic relationship with Indian stake holders in various fields for long terms mutual benefits.

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