Defence Industry

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  • What is wrong with India’s Defence Industrial Policy?

    The above question arises in the context of publicly known government plans of arms procurement amounting to over $64 billion1 as part of the modernisation programme of the armed forces. The majority of these acquisitions will obviously be from abroad and will be concluded in the next five years or more.

    August 22, 2008

    India’s Defence Offset Policy 2008

    The Ministry of Defence (MoD) recently issued a new set of rules for the procurement of arms, ammunition and other defence related products and services. The rule book, known as Defence Procurement Procedure 2008 (DPP 2008), has revised, among others, the offset policy that was first promulgated in 2005 and subsequently revised in 2006. The revised offset policy which retains the earlier minimum 30 per cent offset requirements in defence imports of Rs. 300 crore or more has added a provision of offset banking, besides enlisting a number of categories of defence products.

    August 19, 2008

    Private Sector Challenge to Ordnance Factories

    Ordnance Factories constitute a major segment of India’s defence industrial set- up, whose other constituents are the Defence Public Sector Undertakings (DPSUs), the Defence Research and Development Organisation (DRDO) and varied Service-specific workshops, repair and maintenance establishments. The gross production of ordnance factories during the year 2005-06 was Rs. 8811.59 crores. Total sales including issues to armed forces and other agencies and civil trade in the same year was Rs. 6891.68 crores. This constitutes approximately 40 per cent of domestic supplies to the armed forces.

    July 17, 2008

    Tata’s Forays into Defence Production

    In early May 2008 Tata Group of India and Israel Aerospace Industries Ltd (IAI) signed an agreement to establish a joint venture (JV) in India to develop, produce and support defence products such as missiles, unmanned aerial vehicles (UAVs), radars, electronic warfare (EW) systems and homeland security (HLS) systems. The agreement is in sync with Tata’s broader objective of becoming a “lead system integrator” in the Indian private sector, by consolidating its own resources, diversifying into various fields of production and forging partnerships with major global defence companies.

    June 17, 2008

    Understanding the Economics of Defence Procurement

    “It’s about time that the bureaucrats in the MOD and the military leadership in the Service Headquarters opted not only to do ‘the right things’ but also to do ‘the things right’ in as far as the procurement process is concerned.”
    - Defence & Technology, July/August 2007, p. 13.

    January 25, 2008

    Private Sector Participation in Indian Defence Industry

    India opened up its defence industry to the private sector in May 2001, in a move to enhance the country’s ‘defence preparedness’. To give further impetus to this policy, the Ministry of Defence (MoD) came out with new policy measure related to the concepts of private Industry Leaders [or Raksha Udyog Ratnas (RURs)] “Make” procedure, and defence offsets, in its 2006 Defence Procurement Procedure (DPP). With these policy initiatives, the government’s focus seems to have shifted towards the private sector as far as achieving its long-cherished goal of ‘self-reliance’ is concerned.

    January 08, 2008

    Seminar on Outsourcing Possibilities in Defence: Some Impressions

    The Ministry of Defence (Finance) organised a day-long seminar on March 24, 2007 on Outsourcing Possibilities in Defence. The seminar brought together a variety of perspectives – of the Services, the Ministry of Defence, industry, academia and think tanks. The March 24 event was a follow-up to the first-of-its-kind International Seminar on Defence Finance and Economics held in November 2006. Its importance lies in the fact that not long ago ‘defence’ was considered a ‘strategic’ affair and thereby excluded from public scrutiny and economic analysis.

    April 11, 2007

    Defence Economics: Core Issues

    Defence can seldom ignore the standard economic problem—the need to make critical often hard resource choices. Yet the output of defence studies focuses almost entirely on professional and strategic issues, and little on finance or economics. There is a presumption in most countries that the needs of defence must be met, and often they are met without

    April 2006

    Trends in European Defence Industries in the 1990s: An Assessment

    Significant changes have been witnessed in major centres of military production in recent times. Since the end of the Cold War, indicators of military production – expenditure, R&D expenditure, demand and supply of weaponry, and others – have shown fluctuations. Military efforts of States decelerated for nearly a decade, only to rise again since the late 1990s.

    October 2004

    Comments on China’s Defense Paper 2002

    China’s Defense Paper 2002 was released in December 2002. It is the fourth such Paper since 1995. It clearly affirms that the top priority for China is to continue its modernisation. In particular, economic security is given more attention. The report also echoes the guidelines set at the 16th National Congress of the Communist Party for the future development of China. As stated in the White Paper, “The 16th National Congress of the Communist Party of China… has drawn up a grand blueprint for China’s development in the new century.

    April 2003

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