India wants to embrace more shareholder scrutiny for the sake of national security.
- The govt is seeking to divest 20% of each state-owned defence company including nuclear-missile maker Bharat Dynamics.
- Divestment will provide capital for growth and enough transparency & accountability to drive efficiencies.
- Still structural changes will be required for the state-run defence companies to be more attractive for investors.
- India’s goal is an ambitious $150 billion modernization of its sometimes poorly equipped armed forces, including more local production to curb a flood of costly imports.
- The challenges is to improve state defence companies, which account for the bulk of domestic weapons output but are strained and lack the most modern technology.