Defence Economics & Industry

About Centre

India spends a significant amount of resources on its national defence. Efficiency in utilisation of resources is not only an economic imperative but vital for defence preparedness. In view of this, the Defence Economics and Industry Centre was created in 2006 to promote research on various economic aspects of India’s defence. Since its inception, the Centre has undertaken a number of policy relevant studies besides constantly engaging vital stakeholders (Ministry of Defence, Armed Forces and Industry) on a range of issues. The major focus areas of the Centre are:

Defence Acquisition
- Organisational and procedural improvement
- Offsets
Defence Industry
- Self-reliance in Defence Production
- Efficiency of Defence Public Sector Undertakings/Ordnance Factory Board
- Enhancing Private Sector Participation in Defence Production
Defence Research and Development
Defence Budget

Preference for Local Industry in Defence Contracts: What India Can Do

The new enabling provision in GFR-2017 provides the MoD a chance to amend its own procurement document and include a provision of production reservation and price preference for domestic industry.

Need for incorporating a limitation of liability clause in defence contracts

It would be both graceful and fair to pay a reasonable amount that is seen as equitable compensation for infringement of the fundamental right to life or damages arising from tortious liability of the government.

Furthering India-Japan Defence Cooperation: Arun Jaitley indicates a new approach

While there is no doubt that India could do with help from Japanese defence firms, the modality of acquiring technologies from foreign companies in general requires to be clearly articulated.

Raising Defence Budget to Three Per Cent of GDP

Speaking at the United Service Institution on May 4, 2017, the Chief of the Army Staff said that India needs to spend much more on military modernisation to ensure that economic growth continues unhindered.

FDI in Defence: Need for Liberalisation and Simplification

The government should set up a task force to engage with potential investors and investees and evolve a simplified FDI policy, which has different slabs for different kinds of activities and is free from terms and conditions that are difficult to understand and implement.

Dual Charge – An Opportunity to Fix Financial Management in Defence

It is important to restore the functional self-sufficiency of the finance division of a ministry which handles 17-18 per cent of the total central government expenditure so that it could discharge its responsibilities without real or perceived pressures.

Amit Cowshish
March 21, 2017
IDSA Comments

Examining the Case for Complete Transfer of Technology

The relationship between the cost versus coverage of technology transferred, which likely follows the law of diminishing returns, would make technology acquisition beyond, say 80 per cent, increasingly cost prohibitive, with no matching and assured gains

Defence Expenditure: A Challenge for Defence Economists

The basic challenge for defence economists is to demonstrate that there are other feasible ways of skinning the cat during budget formulation. But the challenge is also inextricably linked with the need for rationalisation of defence expenditure.

Amit Cowshish
March 14, 2017
IDSA Comments

Rebooting the Defence Budget

There is a strong case for abandoning the present approach of looking at the defence budget through the narrow prism of allocation and utilisation, and instead focus on outcomes.

Amit Cowshish
February 28, 2017
IDSA Comments

HAL’s Gamble – Will the “Advanced Hawk” break into the Export market?

On 5 February 2017, a version of the Hawk Advanced Jet Trainer (AJT) was unveiled. The aptly-named “Advanced Hawk” is a joint-venture between BAE Systems and Hindustan Aeronautics Limited (HAL). It has been developed using internal funds on an equal risk basis and offers significant enhancement of the capabilities of the basic Hawk AJT.