Policy

India targets $26-bn defence industry by 2025: Rajnath Singh

Photo: India’s defence minister Rajnath Singh at the SIDM annual session today.

New Delhi: India’s Narendra Modi government has targeted a $26-billion defence industry by 2015, Minister of Defence Rajnath Singh said today.

The target is expected to boost the sagging economy of the country. which has seen the Gross Domestic Product growth decelerating to an over five-year low at 5 percent in the June quarter of 2019-20, against 5.8 percent in the March quarter.

Addressing the second annual session of Society of Indian Defence Manufacturers here today, Rajnath Singh said the defence sector has been identified as one of the most prominent sectors under the Modi government’s ‘Make in India’ initiative to realise a $5-trillion economy by 2024.

Photo: Rajnath Singh addressing the SIDM event in New Delhi today.

Underlining the need to reduce dependency on arms imports, the minister said several steps have been taken under the ‘Make in India‘ initiative to make the country a major defence manufacturing hub and net defence exporter. “The government would not hesitate to initiate more measures, if required,” he added.

He said that the defence production policy reflects the resolve of the government to achieve $26 billion defence industry with an anticipated investment of $10 billion in the aerospace and defence goods and services by 2025. “This will also provide employment to about two million to three million people.”

He said the government has introduced many far-reaching reforms in the past five-and-a-half years to create an ecosystem where private and public sectors contribute together according to their respective strength and experience. The reforms have touched almost all aspects of defence production and procurement, he added.

Rajnath Singh said simplification of procedures has resulted in defence exports touching the Rs 10,745 crore in 2018-19, which is nearly seven times the export achieved in 2016-17 and a target of $5 billion defence exports by 2024 has been set by the government.

Describing India as a big Defence industrial base, the minister said apart from the nine defence public sector undertakings, 50 defence research and development labs and the 41 ordnance factories, the country has seen the emergence of 70 licence-holding private aerospace and defence companies in India since the sector was opened up for the private sector in the early years of this century, creating a dedicated workforce of 170,000.

He said the government has simplified industry licensing process, increased the FDI cap and taken necessary steps to promote defence exports. Defence offset policy has been streamlined, with over $1.5-billion worth of defence offsets being processed last year, and the government-owned trial and testing facility has been thrown open to private sector. Two defence industrial corridors have been launched in Tamil Nadu and Uttar Pradesh.

Elaborating the government’s initiatives to promote Start-Ups and Micro Small and Medium Enterprises (MSMEs), the minister said that at present over 8,000 MSMEs are engaged in defence production. Efforts are on to double this figure to 16,000 units. The government also targets indigenising around 5,000 defence components, currently being imported, in the next five years by 2024.

Under the ‘Make’ procedure, till date, 40 industry development proposals have been given in-principle approval. Eight such projects would have an estimated value of Rs 2,000 crore in next five years. As against 215 defence licenses issued till 2014, the number of defence licenses issued went up to 440 by March 2019, he added.

Rajnath Singh said the Defence Procurement Procedure was revised in 2016 to stimulate the growth of domestic defence industry. A new category ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ was introduced to promote indigenous design and development of defence equipment.

He said in the recent times, most of the capital procurement approvals by the Defence Acquisition Council were given under indigenous development and production category.

Rajnath Singh said the strategic partnership model has been introduced in Defence Procurement Procedure to ensure that Indian private sector manufactures big-ticket items such as fighter aircraft, helicopters, submarines and armored vehicles, to ultimately emerge as global giants in the years to come.

Photo: Guests line up at SIDM annual session today.

Underscoring the symbiotic relationship between innovation and enterprises to flourish manufacturing in today’s fast moving world, Rajnath Singh said that Innovation for Defence Excellence (IDEX) has been launched to promote innovation and technology development. Through the programme, 44 winners have been chosen in 14 projects under two defence innovation start-up challenges.

Referring to the strong Information Technology industry of the country, Rajnath Singh said a road map has been prepared to promote Artificial Intelligence (AI) in national security to make India a significant power in defence AI. It has been planned to develop 25 defence-specific AI products by 2024.

The minister said steps are being taken to make defence manufacturing sector self-reliant and a new Transfer of Technology (ToT) policy is under preparation that will pave the path of transferring DRDO developed technologies to the industry.

A new policy on the use of DRDO patents by the industry is under consideration to promote and motivate defence industry for innovation. He mentioned that till now, over 900 ToT licencing agreements have been signed with the industry, a major step towards making defence manufacture sector self-reliant.

Rajnath Singh assured the Indian defence manufacturers of all possible support from the government. He said the government is open to new ideas and is committed to fully harness the energies, entrepreneurship spirit and enterprise of private industry in the defence sector.

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