FDI in Defense sector Essay Short Large

Saroj Jangir

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FDI in Defense sector Essay Short & Large

The term FDI refers to the investment that a foreign player or an individual extends to a country’s defence sector. This it is important for the growth and development of the defence industry. FDI develops a country’s defense strength since it benefits from the cash, technological and expertise of other countries.

The presence of capital is one good thing that comes alongside the FDI in the defence industry. Acquisition of manufacturing plants, R & D facilities and setting up infrastructure by the foreign investitures create employment opportunities and economic development. This may lead to a general development of the nation’s defense capabilities in the long run.

Also, FDI brings in the technological advantages as well as the knowledge to the defense sector. Multinationals manage to be in close proximity with the latest technological trends in military structures and weapons. The domestic defense can enhance its skill and technical expertise through collaborations with these firms. Consequentially it is possible to manufacture defense gear of high quality which meets standards of the international market.
About the sharing of knowledge and skills, FDI also plays a big role at the same time. Foreign players in the defense industry come with their practices and other forms of knowledge when they make their investments here. When the local defense companies and employees are exposed to the new methods, this kind of knowledge transfer can therefore be positive. It furthers the growth of the trained workforce and in overall enhances the military sector standard.

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In addition, FDI could make collaborations and alliances with foreigners. This is especially the case when the investors are novices in the particular market they wish to venture into; they seek an alliance with local firms. Between them they are able to enhance relationships between nations while at the same time fostering the defense industry/business. Consequently, it can lead to collaborations in knowledge generation and technology development, sharing of resources and generation of defence hardware in synergy. Some of these relationships can work towards maintaining and enhancing international peace and security and at the same time enhance the defense of that country.

As a result of national security issues relating to the nation it is important that FDI to the defense sector be closely monitored and regulated. The government should ensure that there are strict laws and regulations in place to protect any violations of the essential assets or technological sophisticated methods. It is therefore very vital to balance between shocking the foreign investor and at the same time not compromising the national security.

In conclusion, the FDI in defense industry has lot of benefits to a country. This tends to foster growth in technology, increase the economic development, foster international cooperation as well as promote exchange of information. However, FDI should always be kept on check and regulated to safeguard country’s national security concerns. Since FDI is used effectively it becomes possible to enhance the defense strengths of a country and at the same time support international peace and security.