India levels private/public playing field
The Indian government has withdrawn customs and excise duty exemptions for defence goods manufactured by ordinance factory board and defence Public Sector Undertakings (PSUs), it announced on 1 June.
With the withdrawal of tax exemptions, the government has effectively levelled the playing field between domestic private players and defence PSUs in the Indian market. Private sector manufacturers have long demanded parity with respect to central excise and customs duty payments.
Without the tax exemptions, defence PSUs no longer have a strategic advantage of quoting lower rates in open bids for defence contracts. The initiative has fulfilled the demand of international Original Equipment Manufacturers (OEMs) as well, including BAE Systems, Lockheed Martin, Airbus and Boeing, all of which are actively exploring potential investments in the country.
The Indian government has undertaken a number of initiatives so far to incentivise the private sector, including international OEMs, to enter its defence and civil aerospace sector as it pushes forward with its 'Make in India' campaign.
Rules and procedures have been simplified to promote private participation in defence manufacturing and exports, and to stimulate major manufacturing investments in India. The government has also increased the FDI cap in defence to 49% and de-reserved close to 60% of items required for industrial licence.
More from Defence Notes
-
![What role could holographic and 3D capabilities play in the warfare of tomorrow]()
What role could holographic and 3D capabilities play in the warfare of tomorrow
Holographic and 3D technologies have been lauded by some for their ability to provide technical and operational advantages for military training and planning. But is the hype truly justified?
-
![Unfolding the Golden Dome for America: Seven things you should know about the programme]()
Unfolding the Golden Dome for America: Seven things you should know about the programme
Shephard talked to multiple experts about the most pressing concerns and considerations regarding the air defence system advocated by President Trump.
-
![Industry welcomes UK Strategic Defence Review, but pressure remains on future defence investment plans]()
Industry welcomes UK Strategic Defence Review, but pressure remains on future defence investment plans
While industry reception to the SDR has been positive, questions still remain from analyst and trade associations about what this could mean for future investment and the future UK Defence Industrial Strategy.
-
![UK Strategic Defence Review puts emphasis on autonomy, airpower and munitions]()
UK Strategic Defence Review puts emphasis on autonomy, airpower and munitions
The UK’s Strategic Defence Review (SDR) was launched as one of the first acts of the UK’s new Labour Government in June last year. The review has recommended a major big-picture reform of the country’s forces.
-
![Foreshadowing of UK defence review suggests it is light on programme details]()
Foreshadowing of UK defence review suggests it is light on programme details
The UK’s Strategic Defence Review (SDR) was designed to answer two questions: What is needed to fix UK defence and make it fit for the 2040s, and what do you get for a fixed financial profile? The SDR outlines that work still needs to be done on specifics.
