RSS frontal organisation Swadeshi Jagran Manch has written to Prime Minister Narendra Modi, saying that foreign defence companies should not be allowed to register themselves as 'Indian vendors' by setting up a subsidiary company in India. This would defeat the purpose of Atmanirbhar Bharat, the manch argued.
The Swadeshi Jagran Manch pointed out that with the change in investment policy allowing FDI up to 74 per cent under automatic route in defence production, the definition of ‘Indian vendor’ has been diluted significantly. This means that any foreign company can register itself in India and can acquire 74 per cent equity and still continue to be called an ‘Indian vendor’.
"Swadeshi Jagran Manch is of the considered opinion that ‘Indian vendor’ should only mean an entity in which majority ownership and control is retained by Indian resident citizens. Diluting the definition of ‘Indian vendor’ will be a deadly blow to Indian defence industry. It would cause a severe blow to the existence of the domestic defence industry," Ashwini Mahajan, co-convenor of the manch, said.
In his letter, Mahajan said the foreign companies would start getting same treatment that the domestic industry gets especially under ‘buy Indian’ categories where special preferences are given to the ‘Indian vendors’.
"More importantly, dream of self-reliance in defence production, which is so close to your heart, itself will die down," Mahajan said.
The manch raised objections that a foreign company may be registered in India and manufacturing in India, but its technology policy is not governed by Indian laws and they are governed by the laws of country of their origin.
"All the gains, which were expected by banning of imports of 101 defence items would be squandered away, as foreign companies establishing their units, would be covered by procurement by the government as a domestic company."
The controversy has been raised after government revised its defence procurement policy with focus on developing indigenous industry but also allowing registration of foreign defence companies here under FDI rules.
The manch said that any procurement from companies registered in India, where majority shareholding is that of foreigners, is no different from imports.
"Swadeshi Jagran Manch appeals to you to instruct the concerned office to revise the definition of ‘Indian vendor’ in DAP, 2020 in very clear terms, so that under ‘BUY’ and ‘BUY and MAKE’ categories, foreign entities do not get any advantage over entities owned and promoted by Indian resident citizens," the letter said.
