Indian Indigenous production touches $ 11.2 billion; set to attract global Defence biggies

Indian Defence Dialogue Staff 

New data of Indian Defence market, says it has produced military equipment worth Rs 80,000 crore (some $ 11.270 billion) during the last financial year ending March 31, 2019. 

Indian Defence Minister Rajnath speaking at a ‘Defence Industry Roundtable’ in the national capital said Indian defence industry’s production was Rs 80,000 crore in 2018-19 off  which Rs 16,000 crore ( $ 2.254 billion)  was the contribution from the private sector.

Foreign original equipment manufacturers are needed to tie-up with Indian private industry for various projects in case they want a pie of the Indian market.

New data that the Indian Ministry of Defence will meet its target of having a $ 26 Billion local production by 2025, set in the defence production policy unveiled in March 2018. 

At present, India is the second largest importer of weapons. For more than eight years, New Delhi had held the dubious position of being the largest importer of weapons and has been among the top five importers for decades. The Sweden-based think-tank Stockholm International Peace Research Institute (SIPRI) released a report in March this year and assessed a five-year period (2014-2018) to list India as the second largest importer.

Titled ‘Trends in International Arms Transfers-2018’, it says, “India was the world’s second largest importer of major arms in 2014-18 and accounted for 9.5 per cent of the global total,” the report had said.

Rajnath Singh has voiced the government’s desire to encourage private industry investment in defence sector. And. will also be strengthening the Defence Public Sector Units owned by his own Ministry.  There is also detailed plan to spruce up the 41 Ordnance Factories by bringing in new management practices which will loosen the control of the bureaucracy in the Ministry.

So can India attract the Global biggies ? 

Our take: Yes,  but some changes are needed  to make it attractive and secure or foreign or Orignal Equipment Manufacturers,  for instance, issues of Intellectual Property Rights (IPR).  Fastening the processing under the Strategic Partnership model where Indian companies are partner with a foreign partner to produce, design and develop critical technology and equipment. 

In addition, entry barriers for instance lack of committed orders, for medium and small scale industry need to be reduced. The Defence Investor Cell, established an year ago, in the Ministry needs to take in wider consultations.

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