MM Pallam Raju said there was completive lobbying, but a decision will be taken based on the country's interest.
The government is examining the demand for increasing Foreign Direct Investment (FDI) in the defence sector beyond the present 26% cap and might revisit the issue if it felt appropriate, minister of state for defence MM Pallam Raju said in Bangalore today.
"That is the view that the government is examining... I am sure there are valid reasons why in the defence space they have contained it to 26%. I am sure there must be valid grounds and if the government feels appropriate, it will revisit the issue and examine it," he told reporters on the sidelines of a function in Bangalore.
On future scenario, he said "Rs45,000 crore worth of offset defence obligations are in various stages of negotiations as we speak ... that is the kind of value that is going to be produced in the country."
Asked about the time frame for this, he said, "That should happen as soon as the collaborators are able to put their facility and put their act together."
To a question on the need for defence public sector units to enter private sector, he said, "the defence PSUs have realised the present environment. They have realised they have to evolve faster. They are responding but in areas they are not prepared to respond or have not evolved fast enough, the private sector will quickly replace them."
He said the presence of the private sector was more than what was visible.
"There is great participation by SMEs (Small and Medium Enterprises) who have vertical competencies and very unique capabilities," he said.
Large companies are also entering by virtue of their flexibility to get into joint ventures or technology sharing agreement with companies with greater capabilities, he said.
"That is the beauty of the aspect... if the PSUs are not able to respond in time, the private sector can quickly get into the opportunity as these are newer areas," he said.
On field trials of Medium-Multi Role (MMR) combat aircraft, Raju said the trials were going on and the commercial bid will subsequently be opened and evaluated.
He said there was completive lobbying, but a decision will be taken based on the country's interest.
Talking about the Indo-US relationship, Raju said, "I think it is a relationship that has been strengthening over the past decade and as we find more common ground and common challenges, I think the realisation is gradually coming about on both sides that we need to combine both our efforts and put our energy together and I think that is a step in the right direction".
Earlier, addressing a conference, he said going forward, thrust will be on modernisation of civil aviation infrastructure. Setting up a sub-committee was the first step in this direction.
He also outlined the need to focus on training for defence technology and facilitating a working environment.
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