Date:09/02/2008 URL: http://www.thehindu.com/2008/02/09/stories/2008020950740500.htm

Karnataka - Bangalore

Buy more from Defence PSUs, Centre urged

Special Correspondent

Bangalore: The Joint Action Front (JAF) of trade unions of Bangalore-based public sector undertakings has demanded that the Government reverse the favourable conditions offered to Indian private companies and multinationals.

It said “corporatisation” of ordnance factories and according Raksha Udyog Ratna status to private companies has happened at the expense of the public sector companies in the defence sector.

It pointed out that Defence Procurement Policy of 2006 prescribed that 30 per cent of the value of imported components be procured from Indian companies.

It warned that there are moves by the Defence Ministry to dilute the provisions so that foreign companies need not source defence components or hardware from Indian sources; instead, they could, according to the JAF, “adjust the 30 per cent offset obligation” by sourcing civilian items such as food articles and textiles from Indian sources.

It said that this move would nullify the offset clause prescribed by the policy statement.

It urged trade unions to organise a protest against the move, which it alleged, was a part of the defence Framework Agreement with the U.S. Government.