The Defence Acquisition Council (DAC)’s approval for procuring Defence equipment worth Rs. 27,000 crore from domestic industry will definitely give a boost to the “Make in India” and “Atmanirbhar Bharat” initiatives of the Government. Prime Minister Narendra Modi gave a clarion call for Atma Nirbhar Bharat on May 12. Finance Minister Nirmala Sitharaman announced subsequent defence-specific reforms on May 16. Prime Minister Modi in February had set a target of 5 billion US Dollar for India’s defence exports in the next five years at the inauguration of the 11th Defence Expo in Lucknow. He had invited private players to invest in the country, which would realise the twin objectives of handsome returns on investment and making Asia’s third largest economy self-reliant in defence manufacturing. It has left no doubt in anyone’s mind as to the seriousness with which the government is pursuing defence reforms.
These reforms aim to reduce India’s massive defence import bill. India is aiming to become self-reliant in defence manufacturing as it would be difficult for the country to keep allocating scarce resources to import expensive weapons and platforms to confront complex security challenges along the northern and western borders.
Acquisition proposals approved in the DAC’s recent meeting include the DRDO designed and developed Airborne Early Warning & Control (AEW&C) Systems for the Indian Air Force, Next Generation (GenNext) Offshore Patrol Vessels for the Indian Navy and Modular Bridges for the Indian Army. India’s decision to become self-reliant based on the axiom that a country that depends on imports for its military equipment can never be strong and being self-sufficient in defence sector is linked to “self-respect” and “sovereignty“. It is worthwhile to mention that the government’s decision to make India “self-reliant” does not mean that doors are being closed for foreign investors, but signifies that more doors are being opened for companies to do manufacturing in the country. Keeping this in mind, the Foreign Direct Investment (FDI) limit in the defence sector under the automatic route has already been raised from 49% to 74%.
Earlier, the government also took a major decision to put restrictions on import of 101 weapon and military platforms, including light combat helicopters, conventional submarines and cruise missiles, under a staggered time-line till 2024. Significantly, this decision has created an opportunity to manufacture defence equipment worth ₹52,000 crore per year in India. Incidentally, Indian defence sector is one of the important drivers of the engine of growth and can raise the contribution of manufacturing from 16 per cent of GDP to 25 per cent. India has inaugurated two defence industrial corridors, in Tamil Nadu and in Uttar Pradesh, to boost the flagship ‘Make in India’ programme that in turn would attract investments as well as encourage employment generation.
Increased capabilities in defence production not only offer a great economic opportunity for the domestic industry, but also give an immense strategic advantage to the country in a fast evolving geo-political situation. Diligence and persistence to implement the desired plans are the need of the hour. The process of indigenisation however, entails diligent perspective planning, assured budgetary support, and patience for design, development and manufacture. Also, at initial stages, the indigenous procurements come substantially more expensive, till the development and capital costs get amortized and economies of scale begin to emerge. It is for this reason that even the most developed nations, indigenise defence systems selectively.
In this context, the first step should be to implement this policy in segments in which we already have proficiency like artillery guns, missile, multi barrel rocket launchers, some categories of radars, munitions etc. Alongside, India will have to identify areas in which it desires to become self-reliant, with time lines. In these spheres, India needs to acquire one-time operational requirements and thereafter embark on a 10-15 years budget supported, design, development, and technology acquisition and production programme.
Script: Uttam Kumar Biswas, Defence Analyst