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Government Provides Level Playing Field with Defence PSUs

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  • Defence manufacturing is one of the key sectors among the 25 sectors identified under the Make in India campaign launched by the Government of India.
  • A series of consultations have been held across Ministries / Departments under the mentoring of PMO to enable simplification of rules and procedures to promote private participation under defence manufacturing and exports. This is hoped to stimulate big ticket investments and incentivise Manufacturing.
  • Government of India has withdrawn excise and customs duty exemptions presently available to goods manufactured and supplied to Ministry of Defence by Ordinance Factory Board and Defence PSUs vide Notifications No. 23/2015-Central Excise and No. 29/2015-Customs dated 30.04.2015.
  • This will provide a level playing field to Domestic Private Players bidding for the Government contracts by taking away the strategic advantage with PSUs for quoting lower rates in open bids.
  • With this initiative, the Government has also fulfilled demand of foreign Original Equipment Manufacturers (OEMs) such as Boeing, Airbus, Lockheed Martin, BAE Systems etc. who are actively exploring the scope of future investments in India.
  • The Government has systematically opened up the sector for private investment by increasing FDI cap in defence to 49% and rationalizing conditions.
  • Almost 60% items required for industrial licence have now been de-reserved.

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