Tatas and Mahindras may have to wait for a longer time than previously anticipated to enter into full-scale indigenous defence production as the Left parties want to block the entry of private firms into the strategic sector.

Though a defence ministry committee had shortlisted 14 Indian companies which can be given the permission for defence production, Defence Minister A K Antony’s decision is delayed  due to objections from the Left parties and trade unions.

“There are objections from trade unions. Our aim is to promote indigenisation as we can not go on procuring from abroad,” Mr Antony said, adding that the government was trying to reduce dependence on foreign suppliers.
But the Left parties are up in arms against any such move.

“We will oppose it tooth and nail. Profit-oriented private companies can not be allowed in the strategic sector,” CPI leader Gurudas Dasgupta told Deccan Herald.

“Why can’t the government strengthen the PSUs and ordnance factories? The capacities in defence PSUs are lying under-utilised.  What is the point in allowing the private entities, then?” wonders CPM Rajya Sabha MP and CITU leader Tapan Sen.

A ministerial committee headed by the former defence production secretary Prabir Sengupta recommended that private firms including the Tatas, Mahindras, Larsen and Tubro and Kirloskar may be granted the Raksha Udyog Ratna status, which will give them a level playing field with the defence PSUs and ordnance factories. Once the RUR status is accorded, these companies can access foreign technologies and collaboration to manufacture military hardware.

The proposal is also expected to assist the companies in availing the 26 per cent FDI in the defence sector and taking the advantage of 30 per cent offset as envisaged in the new defence procurement policy.