FDI in defence sector allowed: Pranab

New Delhi: India on Wednesday said it has opened its doors to Foreign Direct Investments (FDI) in its defence industries and defence research and development through the policy of offsets.

Expressing that New Delhi was desirous of opening avenues of high-technology trade with United States, Defence Minister Pranab Mukherjee said "the new offsets policy provided for direct foreign investments in India by major armament companies in the defence industry as well as defence research."

"A roadmap for indirect offsets is also under our considerations," Mukherjee told the third Indo-US economic summit here which was attended by representatives and captains of industry and major American companies.

He also said a defence offset facilitation agency had been set up as a single window agency for the implementation of the policy.

"With these new and transparent policies in place, my hope is that you'll find the defence sector an attractive arena to collaborate and invest in," Mukherjee said in significant remarks which come as the defence ministry is on the threshold of opening tenders worth multi-billion dollars for purchase of weapons platform and systems.

Referring to the Indo-US civil nuclear agreement, Mukherjee said India was keen on its early clearance so that "invisible barriers to trade and investment on the part of both Indian and American businessmen were removed".

He said the passage of the civil nuclear bill by the US Congress would benefit the business communities in both the countries.

Emphasising on India's dependence on the imported oil and gas to meet its energy needs, Mukherjee said the country's inability in accessing alternate sources of fuel could become an impediment to economic growth.

"Our energy consumption levels are going to increase significantly...our growth levels could flag if we don't have access to more than one source of energy," Mukherjee said.

He said there was an urgent need to increase the bilateral trade between the two countries and both sides are currently working towards doubling it in the next three years.

"Current bilateral trade between the two countries is one tenth of the trade between US and China. There is no reason why levels of trade between our two countries shouldn'e rise to, and even surpass, those levels," Mukherjee said.