Make in India for Defence Procurements

Post pandemic world order has changed as despite best technology, resources and infrastructure, world’s largest economies of even America and Europe are unable to cope up the burden of COVID-19. India is no exception to this and as such in changed present world strategic scenario financial emergency is going to be there with no immediate way out. Indian forces are not expeditionary forces that have to be deployed around the globe, we have to just guard and fight only along our borders and dominate the Indian Ocean Region mainly right now. All Defence procurement deals are on freeze and ‘Make in India’ is going to be real priority now to save every penny for reconstruction of Indian economy. India’s spending on Defence is about 1.6 per cent of the GDP. Against a targeted 75% purchase we have achieved only 25%. Only nine Defence public sector undertakings and 41 ordnance factories were ruling domestic military hardware production.
PM Modi immediately noticed this fact and less than three months after becoming PM, Narendra Modi, in his first address from the Red Fort on August 15, 2014, gave a clarion call for “Make in India”. From satellites to submarines, he said, “come Make in India, we have steel… we have discipline, we have resolve… sell anywhere, (but) make in India.” Over Rs 4 lakh crore worth of military purchases have been cleared in the past four years and the Government asserts that two-thirds of the total approvals are under the Make in India category. But only 128 contracts worth about Rs 1,19,000 cr have been signed with Indian vendors. There are many things on right track like FDI of 49% allowed straight away without permission and above 51% with Government approval, two Defence exhibitions, one in 2018 at Tamil Nadu and one in 2020 at Lukhnow, UP. A plethora of policy reforms have sowed the seeds for wider private sector participation, to bridge the gap between Defence, modernisation and indigenisation. Since 2001, of the 452 industrial licences issued, more than half have been issued in last four years only. The proposed investments indicated in the licence applications from 2015 to 2019 are worth Rs 13,743 crore. Indian private players, such as Adani Defence and Aerospace, Tata Advanced Systems, Bharat Forge and Mahindra and Mahindra, have tied up with foreign defence equipment manufacturing firms and Reliance-Dassault factory in Nagpur has started making components for the Falcon 2000 jets.
India is among the top five countries spending on defence, it has the second largest standing army in the world, has allocation of around $47.47 Bn for Defense (excluding defence pension) and around one third of this amount is allocated for capital expenditure. India’s advantage is its scale, which makes it attractive for investment. Buy Indian – Indigenously Designed, Developed and Manufactured (IDDM) is the key for Indian Defence forces now. Indian Army had conducted an extensive outreach programme with 32 interactions at industrial-academic hubs across the country in 2016-17. Field trips for scientists/engineers have been organised to Kashmir, Sikkim, Rajasthan, Rann of Kutch and Ladakh to get on ground experience. Some product outcomes of the outreach were on display at Defexpo 2020, an open and encouraging policy that “Tests and Trusts Make in India”. Indigenous Akash Surface to Air Missile System, Dhanush Artillery Gun system and Light Combat Aircraft are major achievements. DRDO and HAL have important roles to play. Local manufacturing will be more expensive in the short run compared with imports, as factories have to be built and capex spent, but it will create jobs and boost our economy which is the immediate requirement of country. CDS Chief Bipin Rawat is absolutely spot on for indigenisation of Defence procurements, ground work has been done in last six years and now it is the time for industry and Government to come together to make it possible in shortest span.

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Courtesy: Daily Excelsior:  13th May, 2020