Arun Kumar | 18 Jul, 2012 A
US think tank has suggested that India should raise the limit of foreign direct
investment from 26 percent to over 50 percent in order to incentivise US
companies to invest in its defence industry.
Raising the FDI limit is one of the recommendations in five key areas for both
the United States and India made by the Centre for Strategic and International
Studies to help "unlock the full potential" of their defence
To meet strategic challenges, the report suggests that the US and India engage
in an in-depth discussion about India's defence needs that stems from a joint
vision for the strategic defence relationship and should designate one official
on each side to promote bilateral defence trade.
In the area of political challenges, the report suggests that the United States
needs to be consistent and reliable in its technology transfer decisions and in
its provision of purchased defence equipment.
In turn, the Indian government should craft a public narrative about the
benefits of mutual partnership to counter negative perceptions within the
Indian political system, it said.
To meet procedural and technical challenges, the report suggested that the US
and India should actively work to develop ways to accommodate the Foreign
Military Sales system within the Indian Defence Procurement Procedure (DPP).
India should develop an offset strategy that clearly lays out the technologies
and capabilities India hopes to derive from the offset programme and also
consider indirect offsets to be applied toward India's many infrastructure and
related needs, it said.
To overcome bureaucratic challenges, the report suggests that the two countries
should seek to facilitate greater transparency and predictability between their