The Indian defence industry is not averse to allowing higher Foreign Direct Investment (FDI) than the 26% currently permissible, if induction of high technology is a national requirement.

This was stated by the Mr. K. P. Singh, Secretary, Defence Production (DP), while addressing media persons on the eve of ‘Aero India 2007’, the sixth edition of the International Aerospace & Defence Exhibition at the Yelahanka air base here today. Mr. Singh said: “We could always have a case-to-case approach to allowing higher then the stipulated 26% equity from foreign companies provided high-tech items were involved. For this we could always go to the Cabinet for approval. We have an open mind on the issue.”

He said for kick-starting the Indo-Russian defence cooperation, the inter-governmental commitment has to be signed and very shortly a HAL and the Department of Defence Production team will be visiting Russia to firm up the modalities of cooperation. “Only minor issues remain to be sorted out such as the permission required to export to third countries”, Mr. Singh said and expressed confidence that these will be resolved soon.

He said the first offset agreement has been signed between Alta of Israel and two Indian private companies – Larsen & Toubro and Estra for the procurement of high-tech radars. Mr. Singh hoped that in the next 10 years large business opportunities would come to Indian suppliers, as the offset obligation on foreign buyers will be to the tune of US$ 5 billion.

Giving details of the Aero India 2007, which will be inaugurated tomorrow (February 7, 2007) by the Defence Minister, Mr. A. K. Antony, the Defence Secretary said: “The air show affords a great opportunity for Indian industry to integrate with global defence industry leaders under the overall guidelines laid out by the offset policy announced by the government.

This year, Aero India is witnessing an overwhelming participation of 500 companies, up from 380, which participated in the air show in 2005. “This represents a 30% growth on an event-to-event basis and is a very good indicator of the response we are receiving from foreign exhibitors,” Mr. Singh pointed out.

For the first time, Aero India will display exclusive business jets, he said and added that a large number of chalets have been built to facilitate business-to-business meetings in the show grounds. A total of 35 chiefs of air force of various countries have already arrived in Bangalore and expected to benefit greatly from the product display and aircraft capabilities.