Easier export licensing norms for defence PSUs in the works

The easing of export licensing norms is expected to benefit PSUs like Hindustan Aeronautics (HAL), Garden Reach Ship Enterprise (GRSE) and Goa Shipyard (GSL). While HAL is looking for foreign buyers for its advance light helicopter Dhruv and Dornier aircraft, GRSE and GSL want to sell their naval and offshore patrol vessels.

Talking to the mediapersons on the eve of the 8th edition of the DefExpo 2014, Ashok Gupta, additional secretary (defence production), MoD said: ??The government is working towards easing the norms for export licenses for public and private sector defence firms. We will hold consultations with all the stakeholders soon.?? The expo will be held in the capital between February 6 and February 9.

On whether it is a problem for Indian military hardware with American components to be exported to some countries in South America, MoD officials said, ?If there are certain US manufactured equipment on systems, then America’s permission would be required.?

Outlining major features of the exhibition that has grown in size over the years, Pati said this time 624 companies, of which 256 are Indian and 368 foreign, would be participating. To a question if China was invited for the exhibition, Pati said the Chinese were not invited and the list of countries to be called for the show was decided after consultation with the ministry of external affairs. Through the exhibition, the government is looking forward to encourage strong partnerships between India and international manufacturers capable of meeting India?s growing defence needs.

The largest domestic exhibitor would be the Defence Research and Development Organisation (DRDO) that would be displaying its full range, bringing in live UAVs and tanks for the event. ?DRDO has a very important role in driving indigenisation and promoting research and development. It helps in developing technology, indigenising it and developing vendors,? Pati said.

The secretary said the exhibition would also provide foreign companies an opportunity to tie up with Indian firms to meet their targets under the defence offset policy, which is being modified to allow participation of more firms.

The companies have R20,000 crore worth of commitments to fulfill up to 2022. Also, he noted that while 26% FDI cap exists on defence purchases, it can be relaxed by the government in case a vendor brings in state-of-the-art technology. On the exclusion of services sector from the list of avenues where offsets could be done, he said a committee under an additional secretary-level officer has been formed to look into the issue and it will review the fields in which offsets could be performed.

The largest overseas participation would be from Russia, the largest arms supplier to India. The largest participation of companies would also be from Russia at 37, followed by France at 24 and Israel at 20.