While Mahindra’s foray into defence production and the acquisition of foreign companies demonstrates the private sector’s initiative, the government needs to introduce further reforms to promote the role of private companies in Indian defence industry.

The effectiveness of the procurement process needs to be viewed in context of the operational and structural readiness of the armed forces. If the existing framework proves to be weak and unable to deliver required levels of military preparedness, the framework may have to be re-laid for its effectiveness and deliverability.

With the growth of the public sector in Defence Production a large number of industrial units in the Private Sector has also grown with varied scales of operation in areas like outsourcing of raw materials, components, sub-systems, assemblies and sub-assemblies.

If India does not modernize in an evenly spread out manner, it will be faced either with the prospect of its armed forces not being prepared, or rushing to make purchases amidst crises, or creating needless hysteria when frenzied modernization occurs.

Even as the new amendments incentivise domestic companies to enter defence production, the government has made it clear that it wants a competitive environment in defence industry.

The orientation of the existing administrative set up in Service Headquarters and in departments under the Ministry of Defence is to plan for the utilization of defence budget allocation. They are not in a position to pay attention to the aspect of defence receipts.

The US Department of Defence has been contemplating whether to lift the ban on F-22 exports, the fifth generation stealth aircraft. This would mean that many of the US allies namely Japan, Israel and others might become interested in procuring the aircraft. For Japan it would provide much needed air superiority to the Japanese Air Force concerned at North Korean long range missiles and nuclear capabilities (even though the US has stationed a dozen F-22s at Kadena air base in Japan since May 2009). Israel would like to get the aircraft to launch any pre-emptive strike on Iran.

Is the French 4th+generation fighter aircraft doomed? This question must be anguishing people in Dassault and the French government. The Rafale has not won any contract in the export market since its entry into service in 2004 and is now apparently out of race for the MMRCA contract. What lies behind all these repeated commercial fiascos? The Rafale lost five major bids against its US counterparts in recent years: in South Korea (2002), Singapore (2005), Saudi Arabia (2007), Morocco (2007) and apparently India.