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    An employee walks past a poster showing a Barracuda submarine at the industrial site of the naval defence company and shipbuilder DCNS in La Montagne near Nantes, France, April 26, 2016

    India Rejects DCNS’ Offer to Set Up Subsidiary With 100% Direct Investment

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    French ship-building Company DCNS has failed to impress Indian authorities with its proposal to set up a subsidiary in India under the 100% foreign direct investment option.

    According to sources, the proposal was rejected as India’s Defense Research and Development Organization (DRDO) suggested to the Ministry of Defense that the technologies DCNS proposed to bring with it were no different from locally developed technologies. 

    This was the first offer by a foreign firm to set up a subsidiary with a 100% foreign direct investment option. The offer got rejected as technology proposed by DCNS was already available in India.

    On August 12, Sputnik quoted DRDO sources as saying that there was nothing modern about the AIPS technology proposed by the French firm.

    Former financial adviser to the Ministry of Defense Amit Cowshish said, "They (DCNS) were offering something which is already available in India. The Defense Research Development Organization is already developing AIPs in collaboration with DCNS for Scorpene class submarines.”

    DCNS is facing a difficult time in India as India has asked some serious questions about the recent leak of data regarding its ongoing USD 3.5 bln six submarine project. India has alleged that documents had been leaked from French side and that should be investigated immediately. DCNS is yet to respond to the specific queries made by the Indian government.

    In June this year, India had tweaked FDI norms for the defense sector. According to the new norm, "foreign investment beyond 49% is permitted through government approval, in cases resulting in access to modern technology in the country or for other reasons to be recorded.”

    Air Cowshish says, "FDI proposals for 100% have to be in areas where India lacks either the existing capabilities or is not even developing it."

    Independent propulsion systems are expensive and can be retrofitted in old ships to enhance the survivability of the submarines. It uses a limited amount of stored liquid gas which ultimately is used to charge the battery of submarines. Due to this, submarines can remain in water for longer periods. Otherwise, submarines have to come back to the surface to charge their batteries.

    Related:

    Wait Isn't Over for French Firm DCNS to Set Up Subsidiary in India
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