NEW DELHI: Languishing in the strategically-vulnerable position of being among the top three arms importers in the world for years, India now wants to build a major defence industrial base (DIB) for self-reliance in weapon systems and exports to other countries within the next five years.
The defence ministry on Monday released a draft defence production and export promotion policy (DPEPP 2020), with the stated objective of achieving a turnover of Rs 1,75,000 Crores ($ 25 billion), including export of Rs 35,000 Crore ($ 5 billion) in aerospace and defence goods and services by 2025.
A similar draft policy in 2018 had set out similar goals, but nothing much came out of it. The estimated size of the existing Indian defence industry is around Rs 80,000 crore, with the public sector’s contribution being almost 80% of it.
There is no getting away from the fact that India desperately needs to bolster its fledgling DIB by getting the private sector to jump into defence production in a major way.
The public sector, which includes DRDO and its 50 labs, four defence shipyards, five defence PSUs and 41 ordnance factories, also concurrently needs to be drastically overhauled to deliver cutting-edge weapon systems without huge time and cost overruns.
The ongoing military confrontation with China has only served to further drive home this point with the 15-lakh strong armed forces scrambling to import a wide array of weapon systems, from drones and assault rifles to missiles and ammunition, to maintain operational readiness along the northern borders.
But whether the stated goals of the draft DPEPP 2020, which is envisaged as an “overarching document to provide a focused, structured and significant thrust to defence production capabilities”, can be achieved in five years remain to be seen.
The draft DPEPP says the aim is to reduce dependence on imports and take forward “Make in India” initiatives through domestic design and development, as also promote export of defence products as part of the overall ‘Atmanirbhar Bharat’ policy.
DRDO, for instance, will set up missions in select fields in consultation with the armed forces and other scientific and industrial establishments to develop futuristic weapon systems.
These range from hypersonic, ballistic and cruise missiles to armoured vehicles, gas turbine engines, submarines, fifth-generation fighter jets, transport aircraft, robotics and airborne sensors.
The draft policy brings out multiple strategies with the focus areas being procurement reforms; indigenization and support to MSMEs/Startups; optimization of resource allocation; investment promotion, FDI and ease of doing business; innovation and R&D; DPSUs and ordnance factories; quality assurance and testing infrastructure; and export promotion.
The policy comes after the government in May made it clear the armed forces will have to shed their penchant for exorbitant foreign weapon systems unless they can be made in India through joint ventures with global armament and aviation majors.
The government had also announced the import of certain weapons would be banned through a progressively-expanding negative list, while the FDI limit would be hiked to 74% from the existing 49% in the defence production sector through the automatic clearance route.
With an annual defence budget of about $70 billion, India is behind only the US ($732 billion) and China ($261 billion) in terms of military expenditure around the globe. It is also the second-largest buyer of foreign weaponry after Saudi Arabia in the world, accounting for 9.2% of the total global arms imports during 2015-2019, as was earlier reported by TOI.