New Delhi, Sep 19 (IANS) The CPI-M Monday asked the government to reverse its move to disinvest 10 percent of shares in Hindustan Aeronautics Ltd (HAL) and asked it not to privatize the defence industry.

"HAL will now become the third defence PSU (public sector undertaking) in which the state has off-loaded stake after Bharat Electronics Ltd (BEL) and Bharat Earth Movers Ltd (BEML)," the Communist Party of India-Marxist said in a statement.

"HAL is not only much larger, it is also more strategic, being the only aircraft manufacturer in the defence sector and the largest in Asia.

"The government has opened up defence manufacturing to the private sector with upto 100 percent Indian equity and 26 percent foreign investment, with formal proposals doing the rounds to increase FDI limit to 49 percent.

"It is clear the government is succumbing to pressure from corporates who are only looking for substantial and assured profits from a larger share of India's burgeoning expenditure on defence acquisitions," it said.

"The excuse advanced by government that HAL needs funds for modernization is untenable.

"With orders having increased by over Rs.8,500 crores, and huge contracts in the pipeline including through 30 percent offsets of several large defence purchase orders, HAL has numerous other options for raising funds.

"The CPI-M demands the reversal of the HAL divestment, which could well be a precursor to deeper inroads by Indian corporates or even foreign defence majors at a later time.

"The CPI-M demands a roll back of the policy of privatization of the defence industry and opening it up to foreign participation. These measures will lead to dismantling of India's hard-won technological self-reliance besides endangering national security."