India poised to become major defence sourcing hub: Study

NEW DELHI: The government should establish a dedicated defence-specific Special Economic Zone, apart from tax equalisation subsidy, as fiscal

regime played a critical role in the defence market growth, an industry study on Wednesday said.

It also sought exemption from Research and Development Cess for joint ventures implementing the offset obligations under the Defence Procurement Procedure introduced a couple of years ago to energise the defence market.

"The government is urged to consider the establishment of dedicated defence-specific SEZs, establishment of a tax equalisation subsidy linked to value of goods and services supplied to the defence sector, and exemptions to offset JVs from R&D Cess," a joint study by industry association CII and audit and advisory firm KPMG released here said.