New Delhi (Staff Correspondent), November 14: India has been breathing, thinking and living on the idea of Make in India for the past decade. The initiative was launched globally in September 2014 as a part of India’s renewed focus on manufacturing. The objective of the Initiative is to promote India as the most preferred global manufacturing destination. This included machinery, goods and all kinds of products ranging from a needle to an tank and from submarines to missiles.
When it comes to Make In India, defence sector plays a vital role for India and it has, over the recent years, paced up its production as the country aims to be one of the global producers and exporters of defence equipment. India is also focused to bring down its need of technology sharing and in future plans to indigenously build technologies that will help it up its defence game.
Given some recent developments, the Ministry of Defence is focused to enhance the defence production capabilities of the country for self-reliance and exports in Defence sector, including Aerospace and Naval Shipbuilding sectors.
The government has taken several policy initiatives in the past few years under ‘Make in India’ program and brought in reforms to encourage indigenous design, development and manufacture of defence equipment in the country, including design and development of the projects like Kamov 31 – a military helicopter originally developed for the Soviet Navy and currently in service in Russia, China, and India.
These initiatives, inter-alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020; Announcement of 18 major defence platforms for industry led design and development.
One of the major initiatives by India to promote and push the local manufacturing and modernisation is liberalisation of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route.
Launch of Innovations for Defence Excellence (iDEX) scheme involving startups and Micro, Small and Medium Enterprises (MSMEs) which are being encouraged to jump into the game of manufacturing defence equipment is also an initiative that is immensely gaining success and popularity.
Other than these, the government has launched a portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs and has also brought significant reforms in offset policy with thrust on attracting investment and transfer of technology for defence manufacturing by assigning higher multipliers.
Above all, two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu are also being established to give domestic production a further push.
Based on the data from the defence ministry, India’s success rate and growth in defence manufacturing and production can easily be explained in below listed facts –
- For the financial year 2023-24, India’s defence budget was INR 5.93 trillion, which is higher from INR 5.13 trillion allocated for previous FY.
- India’s defence exports have experienced significant growth, from INR 1,521 crore in 2016-17 to INR 15,980 crore in 2022-23.
- As of August 1, 2022, India’s defence production for FY 2022-23 reached INR 17,885 crore (US$ 2.24 billion).
But despite such initiatives and results what’s stopping India’s growth in defence indigenisation are multiple factors to which the country needs to pay urgent attention.
If government data is to be believed, India’s defense production and exports have increased, with about 65% of defense equipment now manufactured in India. India’s defense exports have also increased from 686 crore rupees in 2013-14 to over 21 thousand crore rupees in 2023-24.
However, the need to scale up defense production to match the armed forces’ procurement budget is still a mammoth task that lies ahead. Other than this, poor design capability, inadequate investment in research and development, and a weak relationship between the research and establishment, production agencies, and the end-user is what is largely affecting India’s aim of attaining complete self reliance in defence manufacturing.
Another major shortcomings of defence industrial base has been the lack of private sector participation. The majority of defence production in India was being carried out by public sector undertakings (PSUs) and the IOFs (though IOFs have been corporatized in 2022).
The private sector participation in defence production is restricted due to the complex licensing and regulatory procedures, lack of a level playing field, and limited access to technology.
Other than these, the Indian defence industry is largely dependent on foreign technology and has found it difficult to develop and produce cutting-edge technology indigenously.
Lastly, however, this remains undebated that the indigenisation of India’s defence sector is a crucial priority for the country’s strategic and economic growth.
The Indian government has and continues to take initiatives to bring down the country’s dependence on imports and has rather encouraged domestic production by promoting and providing support for self-reliance in defence sector.
Not just the acquisition procedures but also through export promotion policy and its ambitious Atmanirbhar Bharat mission some of the vital steps have been taken by the government that have proven to be in the right direction aiming to create a favourable ecosystem for India’s indispensable growth of the sector of defence manufacturing.
