Execution Key For Defence Manufacturing In India

Defexpo 2018, the biennial defence exhibition, will be held at Chennai from 11-14 April. It has been nearly four years since the Make in India initiative was announced by Prime Minister Narendra Modi. Fundamentally, the initiative is meant to enhance manufacturing, attract investments, create jobs and increase technical depth. But for defence, there is the added criticality of achieving self-reliance for security.

The intensity and complexity of security challenges is increasing due to the nexus between China and Pakistan. With infrastructural improvements in Tibet, belligerence on the Line of Actual Control has increased. China’s military engagements with South Asian and Indian Ocean region states have been increasing. There is a continuing endeavour by Pakistan to push the envelope of proxy war. Faced with such security threats, India cannot afford to be 60-70% import-dependent for defence. Furthermore, the international community expects India to be a net provider of security in the Indian Ocean region. India is poised to become a $5 trillion-dollar economy by 2025. Such economic growth requires to be undergirded by strong security, and underpinned by the capability to project power in the battlespace, both physical and cognitive.

Close on the heels of Make in India, the defence procurement procedure (DPP) 2016 incorporated several new provisions to achieve indigenization and promote MSME (micro, small and medium enterprises). These include the ‘Buy-Indigenously Designed Developed and Manufactured’ as the most preferred category for procurement, ‘Make II’ (private industry-funded design and development opportunity for simpler requirements), and reservations for MSME in Make I and II. Concomitantly, there were policy interventions in the management of offsets, an increase in foreign direct investment (FDI) in defence from 26% to 49% and the strategic partnership programme.

Even such forward-looking policies could not make the impact that had been visualized. Past legacy and convoluted procedures kept process dominant over outcome. In the past six months, with defence minister Nirmala Sitharaman, a concerted drive is visible. With swift shuttles between the front line and industry, the minister has made a spate of announcements like simplification of Make II, two defence industrial corridors, and the draft defence production policy 2018.

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