Minister of State for Defence Rao Inderjit Singh today sought to allay apprehensions over increasing the FDI limit in defence sector saying this move will help India to reduce corruption in the sector and eliminate middlemen.
His comments came in the wake of former Defence Minister A K Antony's statement that lobbies were working towards allowing 100% and this was against national interest after the announcement was made in the General Budget.
"Many people have raised their concerns after the FDI in defence sector has been increased from 26% to 49%... FDI will help eliminate the unnecessary role of middlemen and as a result, the scope of corruption will reduce," Singh said on his Facebook page.
The Minister said the move will also help in decreasing our dependence on imports and thus will help rein in the rising import expenditure. He said despite the increase in FDI, the ownership stays with the Indian companies. "Three years back, we surpassed China as the world's leading importer of weapons and have retained the distinction since then. We import 70% of our armament needs. China which also stands at the second position in terms of import expenditure in defence sector is performing remarkably well by developing indigenous defense technology and trying to become self-sufficient," he said.
Singh said India was still dependent on its public sector units and "only 15% of our equipment is state of the art and about 50% face obsolescence". He also batted for allowing up to 100 per cebnt FDI in the sector saying "many developed countries have witnessed progress in their defence sector and industry after allowing 100% FDI".