The meltdown of the Soviet Union had encouraged Russia, the UK and France to privatize state owned defense manufacturing companies. But India did not change their ownership pattern all these years. It has now decided to take the plunge in order to target $2 billion in annual defense exports and absorb work orders for $14 billion in offsets for foreign defense imports.
The Indian government has decided to sell 26 per cent stake in a fully owned defense equipment manufacturer. The Government currently holds 54.03 per cent stake in Bharat Earth Movers Ltd (BEML) which will come down to 28.03 per cent after the sale of 25 per cent stake.
BEML manufactures military variants of Tatra vehicles, field artillery tractors, medium & heavy recovery vehicles, tank transportation trailers and even ground support vehicles for missiles.
This is just the third strategic approval in last 12 years by any Indian government. Government expects to collect more than $150 million from the stake sell.
This week, Manohar Parrikar, India's Defense Minister, had said that Indian defense companies, including from the private sector, will achieve $2 billion in exports by 2019 from last fiscal's $ 309 million. The Indian government will back the drive by setting up a dedicated national agency to promote defense sales.
"An independent export promotion body will help the Indian industry to achieve the target of $ 2 billion by 2019.The government will initially hold the export panel's hand and later it will be a self-sustaining body," Parrikar said.
India is keen to export its defense equipment to Vietnam, Mauritius, Bangladesh, Philippines, Afghanistan and Oman.
