The Missing Foreign Hand

In March 2018, the french naval Group, the erstwhile DCNS, the manufacturer of Scorpene submarines, grabbed headlines by seeking approval for 100 per cent foreign direct investment, or FDI, to manufacture Air Independent Propulsion, or AIP, systems, which give submarines substantially greater endurance. For a country which has managed to attract only $5.13 million foreign funding in defence manufacturing in the last two decades, this was a big deal.

It was a test for policy changes Prime Minister Narendra Modis government had been making to attract investment in local defence manufacturing that included abolishing the cumbersome process for Cabinet Committee on Security's (CCS's) approval for all FDI proposals above 49 per cent. However, it hit the wall of Nirmala Sitharaman led defence ministry after the DRDO convinced it that this was not