Swadeshi Jagran Manch urges PM Modi not to dilute definition of Indian vendor

Mumbai: The RSS affiliate Swadeshi Jagran Manch (SJM) in a letter to PM Narendra Modi has said the dilution of definition of ‘Indian Vendors’ will be a deadly blow to the Indian defence industry. It would cause a severe blow to the existence of domestic defence industry, both big and small which has developed indigenously, as foreign companies would start getting the same treatment which domestic industry gets especially under Buy Indian categories where special preferences are given to the Indian Vendor. Dream of self-reliance in defence production itself will die down.

“With the change in FDI Policy allowing FDI up to 74 percent under Automatic Route, the definition of ‘Indian vendor’ has been diluted significantly to such an extent that any foreign company can register itself in India and can acquire 74% equity and still continue to be called Indian Vendor,’’ said Dr Ashwani Mahajan, All India Co-Convenor. He further noted, ‘’ We shouldn’t forget that if a foreign company is registered in India, and has started making in India, its technology policy is not governed by Indian laws, they are governed by the laws of their country of origin.’’

SJM has argued that procurement from companies registered in India, where majority shareholding is that of foreigners, is no different from imports, as they would be either importing their components from foreign destinations or would be contracting with companies of their choice, with little chance of developing domestic capabilities.

‘’We understand that the intent of the Government, so far has been that first preference be given to Indian Indigenously Designed Developed and Manufactured (IDDM) that is, Buy Indian IDDM. Therefore, by any chance companies registered in India but owned by foreigners, shouldn’t be included in this category. Second preference in government procurement should be to Indian companies, namely companies having Indian shareholding of 51 percent or above,’’ said Dr Mahajan.

However, if ‘clarification’ is to be believed, in both these categories, foreigners will gain dominance and ‘Self Reliance’ in defence will be a distant dream, he added.

‘’Swadeshi Jagran Manch, therefore, appeals you to instruct the concerned office to revise the definition of ‘Indian Vendor’ in Defence Acquisition Procedure, 2020 in very clear terms so that under ‘BUY’ and ‘BUY and MAKE’ categories, foreign entities do not get any advantage over entities owned and promoted by Indian resident citizens,’’ concluded Dr Mahajan.

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