Defence Industry

The monograph makes an attempt to estimate India’s defence self-reliance index, which has been a subject of intense debate in recent years. It also surveys the key recommendations of various high level committees set up by the Indian government post the Kargil conflict. The monograph concludes with key policy measures to revitalize India’s moribund defence industry.

While India is establishing a strong aviation ecosystem by bringing together all stakeholders including the government, DPSUs, tri-services, academia and industry partners, it is believed that private Indian industries will be the crusaders for the government in defence production, particularly in the UAV vertical.

The GFR 2017 permit individual ministries to issue detailed instructions to address the needs and complexities of procurement carried out by them. The question is whether those principles and rules come in the way of the Ministry of Defence evolving a more efficient procurement procedure that meets the armed forces’ aspirations.

If existing procurement procedures are a hindrance in acquiring state-of-the-art defence materiel expeditiously, a case needs to be made out, based on demonstrable drawbacks of the existing system for a detailed blueprint of what system should replace it.

The Ministry of Defence has taken significant steps in recent times to boost domestic defence manufacturing and increase the role of the private sector to reduce dependence on imports and achieve self-reliance.

There is a need to formulate a composite policy that focuses on indigenisation in high priority technology areas, shedding the notion that it must necessarily result in savings. A more modest and focussed mission-mode approach to indigenisation can produce better results.

The iDEX has made a commendable effort at putting a defence start-up ecosystem in place. The challenges ahead include maintaining momentum, obtaining funding, and accessing toolsets and data sets.

Raising the FDI limit by itself may not enthuse the foreign investors as per the expectations. To make the defence sector more attractive for foreign investment, a whole lot of other related issues will have to be addressed by the government.

It would be helpful if MoD issues a formal order addressing the concerns expressed by various stakeholders about certain aspects of the negative list, especially its impact on projects that involve foreign OEMs and the purpose of bifurcating the capital budget.

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.