Photo courtesy: www.airbusgroup.com

Ajay Banerjee

Tribune News Service

New Delhi, March 14European aerospace and military consortium, Airbus, on Monday said the cap on foreign direct investment (FDI) in defence manufacturing in India should be higher.The Ministry of Defence and the Ministry of Finance have imposed a cap of 49 per cent holding for foreign companies involved in defence equipment manufacturing. This mean 51 per cent stake has to be held by an Indian company.Pierrre De Bausset, President and MD of Airbus Group in India, said: “At 49 per cent you cannot get quality OEM’s (original equipment manufacturer) to come with technology to India”.If foreign companies are to come with high-end technology then the control has to be with the companies, Bausset said at a press conference here to announce Airbus participation in the ‘Defexpo-2016’ scheduled for later this month. He did not specify what kind of FDI cap was suitable but added: “When we bring in technologies we have to have control… if the FDI cap is 10 per cent the risk is lower”. The FDI cap was raised from 26 per cent to 49 per cent in August 2014, months after the BJP-led NDA coalition was voted to power in May 2014.The Airbus had promised an investment of Rs 5,000 crore in India. This includes the shift of the assembly line to produce the AS3665 ‘panther’ helicopter in India subject to Indian Navy selecting the copter for its requirements.  “The investment is dependent on contracts,” Bausset said.In a way, he pointed at the fault-line in the ‘Make in India’ initiative.  In the past, officials of a US company have expressed the need to have greater FDI limits.The FDI in India’s defence sector has been very low since the policy was amended in Aug 2014. Between October 2014 and November 2015 there were only Rs 56 lakh worth of FDI proposal in defence sector.