Centre examining demand to increase FDI in defence: Minister

The government is examining the demand for increasing FDI in the defence sector beyond the present 26% cap and might revisit the issue if it felt appropriate, Minister of State for Defence M M Pallam Raju said here on Wednesday.

Bangalore: The government is examining
the demand for increasing Foreign Direct Investment (FDI) in
the defence sector beyond the present 26 per cent cap and
might revisit the issue if it felt appropriate, Minister of
State for Defence M M Pallam Raju said here on Wednesday.

"That is the view that the government is examining...
I am sure there are valid reasons why in the defence space
they have contained it to 26 per cent. I am sure there must be
valid grounds and if the government feels appropriate, it will
revisit the issue and examine it," he told reporters on the
sidelines of a function here.
On future scenario, he said "Rs 45,000 crore worth of
offset defence obligations are in various stages of
negotiations as we speak ... that is the kind of value that is
going to be produced in the country."

Asked about the time frame for this, he said, "That
should happen as soon as the collaborators are able to put
their facility and put their act together."

To a question on the need for defence Public sector
units to enter private sector, he said, "the defence PSUs have
realised the present environment. They have realised they have
to evolve faster. They are responding but in areas they are
not prepared to respond or have not evolved fast enough, the
private sector will quickly replace them."

He said the presence of the private sector was more
than what was visible.

"There is great participation by SMEs (Small and
Medium Enterprises) who have vertical competencies and very
unique capabilities," he said.

Large companies are also entering by virtue of their
flexibility to get into joint ventures or technology sharing
agreement with companies with greater capabilities, he said.
"That is the beauty of the aspect... if the PSUs are
not able to respond in time, the private sector can quickly
get into the opportunity as these are newer areas," he said.

On field trials of Medium-Multi Role (MMR) combat
aircraft, Raju said the trials were going on and the
commercial bid will subsequently be opened and evaluated.

He said there was completive lobbying, but a decision
will be taken based on the country`s interest.

Talking about the Indo-US relationship, Raju said, "I
think it is a relationship that has been strengthening over
the past decade and as we find more common ground and common
challenges, I think the realisation is gradually coming about
on both sides that we need to combine both our efforts and put
our energy together and I think that is a step in the right

Earlier, addressing a conference, he said going
forward, thrust will be on modernisation of civil aviation
infrastructure. Setting up a sub-committee was the first step
in this direction.

He also outlined the need to focus on training for
defence technology and facilitating a working environment.

New York: To step up pace of
reconciliation talks, the Afghan government has opened direct
contacts with al Qaeda linked Haqqani faction of Taliban,
which is believed to have close ties to Pakistan`s military

President Hamid Karzai`s government has been in direct
contact with Jalaludin Haqqani, the ageing leader of the
Haqqani network, which is based in Pakistan and run by his
eldest son Sirajudin, New York Times reported.

Times said that an immediate member of the Haqqani
family had recently participated in talks with representatives
of President Karzai along with three other top commanders of
the Quetta Shura.

The paper said the talks involve extensive face to
face discussions with highest level Taliban commanders, who
are secretly leaving their sanctuaries in Pakistan with the
help of NATO troops.

"Some of the discussions have taken place right in the
heart of the Afghan capital Kabul and are unfolding between
the inner circle of President Hamid Karzai and members of the
Quetta Shura and the Haqqani network," the paper said, quoting
high level Afghan and Pakistani officials.

Times said the Taliban leaders coming into Afghanistan
for talks have left their havens in Pakistan on the explicit
assurance that they will not be attacked or arrested by the
NATO forces.

"Many top Taliban leaders reside in Pakistan, where
they are believed to enjoy at least some official protection,"
the paper said. Citing one case, Times said Taliban leaders had
crossed the border from Pakistan and then boarded a NATO
aircraft bound for Kabul. In other cases, NATO forces have
secured roads to allow Taliban commanders to reach Afghan and
NATO controlled areas.

The paper said that most of the discussions had taken
place outside Kabul and it was withholding identities of the
Taliban leaders at the request of the White House.

Mulla Mohammed Omar, the reclusive one-eyed overall
leader of the Taliban was being cut out of negotiation in
part, because of his closeness to the Pakistani`s intelligence
agency ISI, officials said.

Times expressed surprise at opening of contacts with
Jalaludin Haqqani, a former minister in the Taliban-led Afghan
government in the 90`s, saying that he led a mafia like
organisation based in North Waziristan.

The group has sheltered several key members of
al-Qaeda and continues to maintain close links to ISI. Haqqani
network, Times said, is believed to be responsible for
carrying out many suicide attacks inside Kabul that have
killed hundreds of civilians.

Gen David H Petraeus, the overall commander of the
NATO forces in Afghanistan, had recently written to Obama
Administration to declare Haqqani network a terrorist


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