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Wednesday, 28 October 2009

From Today's Papers - 28 Oct 09

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L&T pact with EADS held up in FDI cap war

27 Oct 2009, 0109 hrs IST, G Ganapathy Subramaniam, ET Now

The proposed JV between Larsen & Toubro and European giant EADS has become a test case for indirect FDI in sensitive sectors, such as

defence, which have a sectoral FDI cap.

The government has said that FDI in holding companies will not be taken into account for the purpose of calculating foreign investment in a subsidiary if majority in the holding company is held by Indian residents.

However, the Foreign Investment Promotion Board (FIPB) has not taken a decision on the L&T-EADS joint-venture despite repeated discussions since July, as the defence ministry is opposed to the proposal. The defence ministry has argued that the way the corporate arrangement is structured, the venture will breach the sectoral FDI cap of 26% in defence.

The L&T-EADS joint venture, a rare case of FDI in defence, is to manufacture high profile items like military avionics, mobile systems, radars and electronic warfare equipment. EADS is to hold 24.5% stake in the venture while 51% stake will be with L&T Technologies, a fully-owned arm of L&T.

The two partners plan to float another JV, which will hold 24.5% stake in the defence equipment manufacturing company. The second joint venture will deal in design, engineering and product development services, with L&T holding 51% stake and EADS owning 49%. Since EADS will own 49% in the second venture which will hold 24.5% in the manufacturing JV, the defence ministry feels that the sectoral FDI cap of 26% is being breached.

Despite several clarifications, the defence ministry is not convinced, according to highly-placed government sources who do not wish to be identified. “MoD (ministry of defence) has not supported the proposal on the grounds that ownership pattern of the proposed JV is violative of the sectoral cap of 26% in defence....,” the sources quoted FIPB as concluding in its meeting on October 9 when the JV proposal was last discussed.

The defence ministry also sought FIPB’s clearance for further examination of the proposal and it was deferred, the sources said. The proposal is likely to be taken up by FIPB again on October 30.

DIPP also said that the services JV should be owned and controlled by resident Indian citizens and the powers to legally direct the actions of the company should vest with Indian citizens and Indian companies which are owned and controlled by Indian citizens. The essence of Press Note 2 should be incorporated in the articles of association and the memorandum of understanding so that the two JVs are not controlled by foreigners, goes the argument.

Press Note 2 has been a bone of contention ever since it was issued, with the Reserve Bank raising objections and the finance ministry seeking clarifications.

DIPP has maintained that there is no need for clarifications and all the issues that are being raised now were discussed before the decision was taken.

Gurkha soldiers return after Afghanistan tour

25 October, 2009 09:22:00 AFP

Nepalese soldiers from The Royal Gurkha Rifles returned Sunday to their base in Britain and the arms of their families after a gruelling tour of duty in Afghanistan.

More than 100 Gurkhas from Foxtrot Company, drawn from the regiment's 1st and 2nd Battalions returned to Sir John Moore Barracks in Folkestone.

They were each presented with a khada ceremonial scarf and some soldiers sang Nepalese songs as they reunited with their loved ones.

Foxtrot Company deployed to Afghanistan in April and mentored the Afghan National Police across the troubled southern Helmand Province, where British troops are battling Taliban insurgents.

Corporal Kumar Pun, 31, of 1st Battalion, was killed in a suicide bombing in Gereshk in May alongside Sergeant Ben Ross of the Royal Military Police.

"The boys did an outstanding job in Afghanistan in difficult circumstances, not only because of the environment they were in but also because of the enemy threat," said Major Chris Conroy, commanding officer of Foxtrot Company.

"Clearly it was a great shame to lose Corporal Pun and Sergeant Ross but on deploying we knew the threat that we were undertaking."

During their deployment, the British government retreated and announced that all Gurkha veterans with four years' service would be allowed to settle in Britain.

About 200,000 Gurkhas fought for Britain in World Wars I and II and more than 45,000 have died in British uniform. Around 3,500 currently serve in the British army, including in Afghanistan

Fruitful talk with China: Krishna
Tribune News Service

Bangalore, October 27
External Affairs Minister SM Krishna today said India and China would celebrate the 60th anniversary of diplomatic relations between the two countries in a befitting manner in 2010.

Reading out from a written statement, Krishna, who was briefing reporters here after a meeting with his Chinese counterpart Yang Jiechi, said he had a warm meeting with the Beijing representative lasting for around 90 minutes.

“We had a fruitful exchange of views covering all aspects of our bilateral ties,” Krishna said. He said they discussed the usefulness of such high-level exchanges for enhancing trade and economic relations between the two countries and also for promoting contact between the defence forces of the two neighbours.

Fruitful talk with China: Krishna
Tribune News Service

Bangalore, October 27
External Affairs Minister SM Krishna today said India and China would celebrate the 60th anniversary of diplomatic relations between the two countries in a befitting manner in 2010.

Reading out from a written statement, Krishna, who was briefing reporters here after a meeting with his Chinese counterpart Yang Jiechi, said he had a warm meeting with the Beijing representative lasting for around 90 minutes.

“We had a fruitful exchange of views covering all aspects of our bilateral ties,” Krishna said. He said they discussed the usefulness of such high-level exchanges for enhancing trade and economic relations between the two countries and also for promoting contact between the defence forces of the two neighbours.

Senior Pakistan army officer shot

Chitranjan Sawant

Tue, Oct 27, 2009 17:14:23 IST

THE NATIONAL capital of Pakistan, Islamabad is safe no more. One may recall that last week a senior Army officer and his driver were killed in the capital in broad daylight. The officer had come on leave from Sudan where he was on UN Peace Mission.

Of course, before going there, he was the Deputy Director general (Military Operations) and was actively involved in planning the South Waziristan operation against the Taliban terrorists. Perhaps he was a marked man since then.

This morning (October 27), a serving army brigadier in plain clothes and his mother while returning from the local bank in an army vehicle with service markings, was fired upon by a young man. Both he and his mother survived but the window panes of the car were shattered. Panic spread in the area.

There were eye witnesses but their accounts of the event differed materially because they had lost coherence in thought and speech. The terrorists are gaining ascendancy and the commonman is cowering.

Defence acquisitions to be made more transparent

Agencies, Tuesday October 27, 2009, New Delhi

The government will roll out a new defence procurement policy (DPP) Nov 1 in a bid to promote the Indian defence industry and bring transparency in acquisitions, Defence Minister A K Antony said Tuesday.

The reviewed DPP would also aim to promote joint ventures between foreign original equipment manufacturers (OEMs) and Indian companies.

"We are ready to promulgate DPP-2009 with effect from Nov 1," Antony said at a seminar on defence acquisition.

Under the DPP 2009:

* Broad contours of the 15-year armed forces acquisition plan will be made public

* Requests for Information (RFIs) on all acquisitions will be displayed on the Defence Ministry's website

* The role of independent monitors will be increaded to ensure probity in defence deals

Anti-Naxal Ops
1,000 GPS sets for CRPF combat teams

New Delhi, October 27
The CRPF, which is all set to launch a major offensive against the Naxals across the country, is procuring 1,000 Global Positioning System (GPS) sets to be primarily provided to its combat teams.

The GPS has been specifically procured for executing the new action plan of striking at Naxal hideouts, official sources said. The GPS devices will help the personnel to obtain the much-needed navigational help in dense jungles and all such unknown terrains, a CRPF officer said.

The devices would be fed with all the domestic coordinates of the country and would also support world data, he said. The gadget would act as an aid to the existing wireless communications and signals of the force. The CRPF has an independent signals battalion to look after the logistical and communication needs of combat troops.

According to officials, the difficult terrain combined with bad weather in dense jungles hampers the operations. The new hand-held devices would also help patrol parties, which lose their way. A GPS set delivers reliable positioning, navigation and timing services to worldwide users at all times and in all weather conditions. — PTI.

Differences between DoT, MoD over spectrum continue to persist

Press Trust of India / New Delhi October 27, 2009, 16:41 IST

After announcing that 3G spectrum would be auctioned on January 14 next year, Telecom Minister A Raja has sought Finance Minister Pranab Mukherjee's help to resolve persisting differences with the Defence Ministry.

"I would like to point out that the differences between Department of Telecom (DoT) and Ministry of Defence on the 3G spectrum available for auction still persist, and hence, we have not mentioned actual frequencies of the spectrum to be auctioned in the revised Information Memorandum," he informed Mukherjee in a letter, the second in the last 10 days.

The DoT issued the Information Memorandum last week, saying auction would start on January 14 and for this to happen, the blocks of spectrum to be auctioned must be identified latest by the first week of December.

According to Raja's letter, the government would get the revenue, pegged at Rs 25,000 crore, during February next year, provided the auction is held as per schedule.

"I understand that a fast track mechanism is being put in place to sort out the differences between DoT and MoD so that 3G auction can take place in this financial year," the minister said in the letter.

The DoT, which is currently in the eye of a storm over alleged irregularities in 2G spectrum allocation, has allowed foreign entities to participate in the auction process subject to existing FDI rules and guidelines.

New Defence Procurement Policy on Nov 1

Press Trust of India / New Delhi October 27, 2009, 14:18 IST

India will bring out its new Defence Procurement Policy (DPP) on November 1 to promote joint ventures or co-production arrangements for big foreign original equipment manufacturers (OEMs) with domestic firms. The new policy will incorporate changes in the DPP-2008 released last September.

Defence Minister A K Antony told a seminar on defence acquisition here that the current review in DPP, which would be carried out annually instead of once in two years, aims at "promoting and facilitating" Indian industry and "transparency and integrity" in defence acquisitions.

"We have, as per our resolve to revise the DPP annually, reviewed the DPP and are ready to promulgate DPP-2009 with effect from November 1, 2009. The current review is primarily focused on two essential areas of promoting and facilitating wide participation of defence industry and enabling transparency and integrity in acquisitions," he said.

Under DPP-2008, the tender papers were issued only to foreign vendors, who are required to transfer technology to an Indian defence industry, called Production Agency, under 'Buy and Make' category.

"This does not promote setting up of joint venture or co-production arrangements in India by big foreign Original Equipment Manufacturer.

"In order to obviate the above shortcoming, a new category — Buy and Make (Indian) — is being introduced, which allows issue of Request for Proposals (RFP) to Indian industries having requisite financial and technical capabilities to absorb technology and undertake indigenous manufacture through transfer of technology and not through research and development," Antony said.

To ensure transparency and enhance awareness among Indian industry, the Defence Ministry will share the armed forces' 15-year Long Term Acquisition Plan, a public version at that, on its website that would enable them to work out technological requirements and build in-house capabilities to meet future defence needs.

Apart from putting up all Request for Information (RFI) on the website, the Ministry would also invite industry representatives for consultations and presentations during high-level procurement meetings before a decision is taken on the source and methodology for procurement of defence weapons and equipment.

For maintaining probity in defence procurement deals, the Ministry would also increase the role of independent monitors to scrutinise complaints of any violation of Integrity Pact that prohibits corruption.

The new DPP, to facilitate discharge of offset obligations, has incorporated an enabling clause to permit change of offset partners in exceptional cases, Antony said, adding the option clause has been amplified to state that the offsets would not be applicable in cases where the same was not included in the original contract.

Pointing out that the offset policy in defence acquisition was expected to bring $10 billion by the end of current plan period, Antony said India had emerged as a large defence market and this was evident from the fact that the government had provided for about $8.5 billion for capital acquisition in the defence budget this financial year and over the next five to six years, would allocated nearly $50 billion as budgetary provision.

8 U.S. Deaths in Afghanistan Make Grim Milestone


KABUL, Afghanistan — Eight Americans died in combat in southern Afghanistan on Tuesday, bringing October’s total to 53 and making it the deadliest month for Americans in the eight-year war. September and October were both deadlier months over all for NATO troops.

The service members, along with an Afghan interpreter accompanying them, were killed and an undisclosed number of troops were injured in several attacks involving “multiple, complex” improvised bombs, according to a statement from the NATO-led coalition.

A Taliban spokesman, Qari Yousuf Ahmadi, said Taliban fighters had blown up two armored vehicles carrying the troops near Zabul Province. He also said that the Taliban had engaged in a fierce firefight with the Afghan police in Zabul and killed eight officers. His report could not be verified.

On Monday, two helicopter crashes led to the deaths of 11 American service members and three drug enforcement agents, but hostile fire was almost certainly not a factor in those cases, according to a military spokesman.

The October toll of 53 American soldiers killed exceeds that of August, when 51 died, according to, a Web site that tracks military losses in Afghanistan and Iraq.

The United States has been increasing the number of soldiers and Marines in Afghanistan and many have gone into some of the toughest areas of the country. Southern Afghanistan has been the most contested ground with both locally based insurgents and fighters that cross the border from Pakistan.

“A loss like this is extremely difficult for the families as well as for those who served alongside these brave service members,” said Capt. Jane Campbell of the Navy, a spokeswoman for the international troops.

President Obama is deliberating whether to send more troops to Afghanistan and whether to undertake a full counterinsurgency strategy, which requires a larger commitment of resources. The American public is split on whether to send more troops.

Also on Tuesday, the American and NATO-led forces said an Army plane that had been missing since Oct. 13 was found last Wednesday with the remains of three civilian crew members in the high mountains of northeastern Afghanistan over Nuristan Province.

Antony to visit Japan next month

TNN 27 October 2009, 04:44am IST

NEW DELHI: With both India and Japan keen to bolster the strategic and military element in their bilateral ties, defence minister A K Antony will be visiting Tokyo early next month.

Antony, who will leave for Japan on November 8, will hold talks with his Japanese counterpart to discuss ways to boost military ties in fields ranging from counter-terrorism and anti-piracy measures to defence R&D and training.

India is pursuing a "mutually beneficial" defence relationship with Japan to tackle regional and global security challenges, a defence ministry official said on Monday.

"We have common concerns about extremism, terrorism and nuclear proliferation. Piracy is another major issue of worry. The navies and coast guards of the two countries are already exercising together to learn from each other and build interoperability," he added.

The two countries have already enhanced their cooperation in combating piracy on the high seas, both bilaterally as well as under the framework of the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia.

India and Japan are also apprehensive about the long-term intentions of China, which has rapidly modernised its 2.25-million People's Liberation Army.

'Privatisation of OFs will compromise nation's security'

28 October 2009, 04:47am IST

CHANDRAPUR: General secretary of All-India Defence Employees Federation (AIDEF) C Shrikumar, expressed concern over Union Government's plans to privatise the defence units and ordinance factories. He is here to participate in 23rd national convention of AIDEF that began on Tuesday evening at Ordnance Factory, Chanda, located near Bhadrawati.

Interacting with media persons in Chandrapur on the eve of inauguration of convention Shrikumar said, "The issue is related to security of country, hence AIDEF is opposed to privatisation of defence units. The privatisation of ordnance factories may compromise the safety and security of the country."

He informed that there are around 40 ordnance factories in the country off which Maharashtra alone has 10. These ordnance factories supply key ammunition used in army, navy and other government security agencies. There are around 4.5 lakh employees working in ordnance factories and other defence units across the country. "All the workers are opposed to privatisation of the ordnance factories and employees union is all set to take up agitation for the same," he said.

He alleged that private players in defence supply are infested with corruption. Union defence minister has banned seven such companies, which include five Indian and two foreign companies, he claimed adding that privatisation would make these defense units susceptible to corruption. "However the worker unions will not let such designs materialise," he vowed.

He informed that other employees' related problems such as anomalies in recommendations sixth pay commission, recruitment on vacant post, 100% appointments on compassionate grounds, etc will also be discussed at the length and charter of demands drafted in the convention will be forwarded to defense minister AK Antony, he said.

Around 500 representatives from across the country are expected to participate in the convention, he claimed.

Army is all set to induct 124 Arjun tanks

PUNE: After repeated trials and a huge budget overrun, a total of 124 Arjun Main Battle Tanks (MBT) are all set to be inducted into the armoury of the Indian Army by April next year, said Defence Research and Development Organisation (DRDO) scientist and chief controller (R&D) Dr W Selvamurthy.

He was speaking at the valedictory ceremony of the 13th Post Induction Training School (POINTS-13) programme held at the Defence Institute of Advanced Technology (DIAT) here on Monday.

Outlining the contribution of the DRDO in shaping various aspects of the weaponry of the Indian armed forces, he said, “The Arjun MBT is a state-of-the-art battle tank designed and developed by the Combat Vehicles Research & Development Establishment (CVRDE), Avadi in Tamil Nadu. Besides, the ordered tanks are in various stages of production at the moment and would be inducted in a phased manner.”

Urging new scientists to undertake path breaking research in the defence sector, Dr Selvemurthy said, “You need to go for out-of-the-box thinking to scale new heights in defence research and innovation. As the vision of the DRDO is to empower India with superior technology in the field of strategic defence, which the nation has seen from time to time.”

Delivering the valedictory address, chief guest and director, Council of Scientific and Industrial Research (CSIR) Professor Samir K Brahmachari said that defence scientists should develop technologies that can be used for civilian purpose.

He further said, “Scientists in India are categorised as strategic scientists and those for civilian applications. Hence, how to utilise strategic technology for civilian purpose would be a challenge for the budding DRDO scientists.” He said that DRDO has risen on several occasions by providing vital expertise in the field of ballistic missiles and propellant technology, which speaks volumes about the contribution it made in the cause of nation building.

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