India’s declared ‘no-import’ list of military equipment – in all 209 items – does not shut the doors for foreign manufacturers from the market, rather they are allowed to add value or upgrade any of these items and even bring in a new product.
Indian Defence Minister Rajnath Singh has clarified that such a list should not be construed as if we are not welcoming foreign companies. “The no import list does not hamper business opportunities with foreign companies. It is actually an invitation to foreign companies to come and collaborate”.
The Minister while speaking at the 18th India-US Economic Summit, on the theme ‘Bouncing Back – Resilient Recovery Path Post COVID-19’, organised by Indo-American Chamber of Commerce (IACC) on September 15. The IACC is the apex bilateral Chamber that aims to synergise the India-US Economic Engagement.
The embargo on imports is planned to be progressively implemented till 2025. New Delhi promises to place orders of Rs 400,000 crore ( approx $ 53 Billion) on domestic industry over the next 5-7 years by cutting down on these specific imports.
Rajnath Singh’s words coupled with an invitation to US companies to come and work in India and the back drop of massive goodwill of the $ 500 million help to India during Covid 19, all indicate that Indian Ministry of Defence will be okay with foreign companies stepping in for value additions and upgrades on these 209 items that range from a single engine fighter jet to artillery guns. It also means a foreign supplier can have collaboration with an Indian partner to produce a better system of same kind.
Invite to US industry
Co-production and co development is an option and the Indian government proposes to create a business-friendly environment and is strong and reliable investment destination. said the Indian Defence Minister as he laid out a ‘red-carpet’ for US military industries to come and use the available policies of making in India and investing in India.
American and Indian defence Industries can go for co-production and co-development. Indian industry can supply components to American Industries. Boeing and Lockheed Martin – two US based aerospace giants — have a big presence in India. At the India-US 2+2 dialogue last year Rajnath Singh had stressed on the same facts. Read the IDD explainer here.
Make for the world
Foreign OEMs can set up manufacturing facilities individually or partner with Indian companies through a JV or technology agreement to capitalise on the ‘Make in India’ initiative. New Delhi is looking have wider manufacturing base and seeks foreign companies to begin the process of Research and Development with the young minds of the country which will increase the linkages among the industries and create an ecosystem through equal contribution from academia and research.
India US growing ties
Post the Covid-19 pandemic, India-US trade ties along with strategic and military industry relations are on upswing. In the past few weeks industry chambers in the two countries have started re-connecting not just each other but also with officials on either side.
The ongoing military stand-off between India and China has clearly nudged New Delhi’s policy makers towards the US and its policies in the Indo-Pacific. In the past 18 months or so India has gone from a reluctant partner in the Quadrilateral — or the ‘Quad’ — to being its flag bearer.
The two countries have a Comprehensive Global Strategic Partnership, 2+2 Dialogue, Quad Security Dialogue and agreements like Logistics Exchange Memorandum of Agreement (LEMOA) and Communications Compatibility and Security Agreement (COMCASA).
$ 500 million aid during covid
During the second wave of Covid-19 ( April-May 2021) in India, the US Government and US industry captains had taken it upon themselves to send some $ 500 million worth of aid by way of medicines, oxygen and hospital equipment.
From the end of April onwards, the US Administration, private companies based in the US and industry chambers demonstrated the need to work with India. Not only does it bode well bi-laterally, it works equally well on the wider canvas of the ‘Quad’.
The US State Department, on May 28, 2021 gave out a figure of $ 500 million which has been the help to India. Dean Thompson, the Acting Assistant Secretary in the Bureau of South and Central Asian Affairs, overseeing US policy and relations with the countries in the region, at briefing had said “In total, the U.S. Government, state governments, U.S. companies, and private citizens have provided over $500 million U.S. in COVID-19 relief supplies to India”. Off these $ 400 million is the contribution of the Industry
US deployed seven plane loads of oxygen and oxygen-related equipment, therapeutic medicine, PPE kits, and rapid diagnostic tests. “We have also redirected one of our own orders of critical vaccine manufacturing supplies, which will allow India to make over 20 million additional doses of the AstraZeneca COVID-19 vaccine,” said Thompson.