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

Atma Nirbhar through Arms Import Ban

The negative list of embargoed defence items is one more step towards creating a strong domestic arms industry and making India self-reliant in defence production.

Atma Nirbhar through Canteen Sales

Banning the sale of imported items through the CSD could supplement the various domestic industry-friendly policy measures being taken by the government for a self-reliant India.

Atma Nirbhar in Defence Technology

While the steps stipulated in draft DAP-2020 to enable smooth acquisition of systems indigenously designed by DRDO and other public sector entities are a right move, they need to be strengthened further to make procedures more robust and conducive for timely completion of projects.

Should MoD Persist with Defence Offsets?

The changes proposed in the offset guidelines require a fresh look, both on conceptual and empirical grounds, as the new regime is likely to yield diminishing returns.

Amit Cowshish
August 07, 2020
IDSA Comments

Estimating India’s Defence Manpower

India needs to have a public version of defence manpower database as part of its annual budgetary document. This would facilitate greater understanding and analysis of any possible manpower-related reforms in the future.

Bang for Buck: India’s Defence Expenditure in Wider Perspective

Given the limited resource base and various competing demands, the MoD needs to work on a plan to optimise its allocated resources, rather than hoping to bridge its entire resource gap through additional funding from the Ministry of Finance.

Expediting Negotiation in Defence Contracts

Finetuning negotiation protocols and limiting the scope of negotiations could result in rapid conclusion of negotiations and contract finalisation.

Refining Draft Defence Offset Guidelines 2020

The draft offset guidelines 2020, with revamped features, is a bold attempt at attracting technology and investment as well as promoting defence exports. However, the MoD may consider further refining some of the features of the revised guidelines.

Role of Political Guidance for Self-Reliance in Defence

Self-reliance in defence may be better realised if India’s military instrument were to be shaped by political guidance and geopolitical considerations instead of being carried away by the contemporary winds of COVID-19.

Defence Sector Reforms: A Long Haul

Although the new measures announced to fast-track the defence sector are significant, they do not add up to a comprehensive and overarching reforms package.