In an article for The Hindu in 2015, Anil Ambani lauded Narendra Modi’s ‘Make in India’ initiative, “vision for defence resurgence”, and decision to raise the foreign direct investment (FDI) cap in defence from 26 percent to 49 percent.
“There is a need to acknowledge at every level of government that the private sector in India can be trusted,” the Reliance Group Chairman wrote, “to play as important a role in the modernisation of India’s defence capabilities as the public sector.”
The article was published on 3 March 2015 – roughly 25 days before Ambani’s Reliance Defence was incorporated on 28 March 2015.
Allegations are rife against the Modi government for choosing Reliance as a local partner for the Rafale fighter jets deal.
Days after Reliance Defence was formed, Ambani was part of a CEO forum in Paris held on the sidelines of PM Modi's visit to France. On 10 April 2015, PM Modi announced the procurement of a batch of 36 Rafale jets following talks with Hollande.
This is what Ambani wrote in 2015:
The ‘3C’ Policy Change
Noting that the 3Cs – the CBI, the CVC and the CAG – have long crippled decision-making in India’s defence sector, Ambani suggested that the way ahead for India was through adopting the new 3C model of Cooperation, Competition, and Collaboration.
Ambani wrote that although there is a need for discretion in policy formulation and implementation in the “sensitive” defence sector, modernisation of India’s armed forces cannot be hamstrung by “indecisiveness or vacillation”.
He wrote, “Modern governments need to function with the need for discretion in policy formulation and implementation in a sector as sensitive as defence. However, the modernisation of India’s armed forces cannot be held hostage to indecisiveness or vacillation. It is no secret that procedural delays and departmental red tape have often caused a greater loss to the exchequer in defence procurement than any alleged improprieties."
‘PM Modi’s ‘Make In India’ Move a Hope For India’s Defence Sector’
Praising PM Modi's "bold new vision for India's defence resurgence", Ambani noted, “His (PM’s) reputation for being a man of principle and probity and one who is ready to change existing norms and systems for greater efficiency and transparency – are the two elements that will transform our defence sector into one that is modern and world class.
He added, "Underlying the many policy changes that his government has announced – starting with the raise in the foreign direct investment (FDI) cap in defence from 26 to 49 percent and, with cabinet approval, even to 100 percent in identified areas of critical technologies – is the recognition that what we need most of all is a total change of mindset and approach to boosting this vital sector."
In his article, Ambani lists some "urgent points" to bring about the desired change in the country's defence sector –
- Need to acknowledge at every level of government that private sector is as important as public sector in modernising India's defence capabilities.
- Need for a common framework for defence procurement across research establishments, ordinance factories, defence Public Sector Units (PSU) and the private sector to make decision-making 'simpler, faster and transparent.'
- Ease of doing business must be improved since without long-term contracts, certainty of volumes, a quick selection process, transparency and fair payment terms, private players will hardly have incentives to invest huge resources for defence production.
- Need to bring defence licensing and FDI approvals under one umbrella.
- Need for a sovereign defence fund, on a PPP model, where the government will hold 49 percent while defence sector players will hold the rest of the share with no one player contributing more than 5 percent of the total.
- Need to accord infrastructure industry status to defence sector.
‘Our Defence Preparedness is a Sorry One’
Remarking on India’s troubled neighbourhood and the challenges faced in defending our borders, Ambani wrote, "One of the most illustrative examples of how our defence preparedness has suffered is the fact that for 25 years, the Indian Army has not been able to replace the Bofors 155 howitzer gun, a vital force multiplier in our artillery arsenal. This was because no Indian firm made similar weapons. Thus, the new policy of opening up the defence sector to private players will go a long way in ending such self-imposed handicaps imposed on our defence forces."
He had also noted, “Our record in developing our aerospace industry, quite unlike the remarkable strides we have made in other high-technology areas such as space, communications and missile programmes, is a sorry one, hobbled by missed opportunities, short-term thinking, a lack of control on domestic manufacturers, and a blinkered strategic vision.”
Concluding his article, Ambani noted that although the road is long ahead, he believes that with the current leadership, “We have our best chance of success in evolving as a world class defence manufacturing sector. With commitment, cooperation and a clear vision, we can turn the prime minister’s ‘Make in India’ slogan into a reality. It offers us the best chance to repay the brave men and women of our armed forces for their dedication, discipline, and sacrifice."
(With inputs from The Hindu)
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