Manohar Parrikar may meet industry bodies over defence deals

Defence minister Manohar Parrikar on Monday is likely to meet industry associations to take their views on the controversial “strategic partnership” agreement that the government plans to enter into with private firms in critical defence projects like building submarines and fighter planes.

Defence sources were cited by news agency reports as saying that five members each from CII, Ficci, Assocham and PHD Chambers of Commerce and Industry, besides a defence grouping DIIA, will meet Mr Parrikar on Monday which will be followed by a dinner. The industry chambers may express their strong reservation on the subject to the minister.

The feeling among the private industry players is that only the big firms will benefit out of this move. However, even large firms are not open to the idea since they feel that they would be restricted to just specific fields and, therefore, their overall investment and plans will get affected.

According to news agency PTI, Lok Sabha member Amrinder Singh, a member of the Parliamentary Standing Committee on Defence, had recently written to Mr Parrikar against the proposed strategic partnership, saying this would only lead to “crony capitalism”.

At the recently held Defexpo in Goa, various industry leaders had reportedly expressed their reservation against the move to create strategic partnership.

Industrialist Anil Ambani, who is eyeing the defence sector through his newly set up Reliance Defence, welcomed the concept of strategic partners but said there needs to be competition in inter and intra segments. The big players are concerned over a clause that would restrict one company each to the ten broad areas of manufacturing like warships, land systems and submarines.

“Our policies have to be in line with global best practices. Sub-optimal division or groupings will make the industry inefficient. For instance, the division of ship building into above the water and below the water categories,” Ambani was quoted as having said at a Global Investors Summit at the Defence Expo.