Multi-billion defence industry a core area of Self-Reliant India
In terms of sheer size, India's 1,5 million defence forces give it great world rankings: Third for the Army, the Air Force coming in at number four and the seventh largest Navy in the world. The human figures are matched by equally impressive backing in terms of financials as well as military hardware and software.
Recognising the growing demand in the Defence sector spurred by increasing global and internal security concerns, the Government of India has identified the Defence Industry as one of the core areas of focus towards ‘Atma Nirbhar Bharat’ or Self-Reliant India.
Key Technologies Currently Exported
The Government of India has set the Defence production target at US$ 25.00 billion (inclusive of US$ 5 billion from exports) by 2025 from the current Defence production turnover of US$ 11.42 billion.
The industry has already experienced a growth of 700 % between 2016-17 to 2018-19, with exports of US$1.2 billion. Thus the target is reachable and indeed even surpassable. India's Defence Budget for 2021-22 is US$49,6 billion, an 18.75% jump from the preceding year- the biggest increase in 15 years. Of that amount US$ 18.48 billion is earmarked for modernization. The government of India has announced a defence budget of US$70,2 billion for FY 2022-23, a further increase over the previous budget.
Other chunks are for manufacturing tanks, warships, including carriers and nuclear submarines, aircrafts, ammunition etc. and employing around 200,000 people, 52 Defence Research and Development Organisation Labs.
India's Defence Industry was opened to private players in 2001 and many companies including 12000 MSMEs have entered the sector.
More than 40 joint ventures have been formed.
By liberalising the ease of doing business with such measures as the increase in FDI Limit (to 74%- automatic route and 100% with Government approval) and delicensing of defence items, India expects to attract more foreign investment.
India’s Ministry of Defence formulated a draft Defence Production and Export Promotion Policy 2020 (DPEPP) to position India amongst the leading countries of the world in Defence and Aerospace sectors.
The 8 Pillars of DPEPP 2020 are:
• Reform procurement ecosystem
• Indigenize and support MSME and start-ups
• Optimize resource allocation
• Promote investments, FDI and ease of doing business.
• Promote innovation and R&D
• Encourage and reform DPSUs and OFB
• Provide quality assurance and testing infrastructure
• Promote exports
India's Defence system product range is comprehensive and wide ranging. It includes:
• 155 M Artillery, Surface-to-air Weapon Systems, Strategic Weapons, Launchers, Torpedos, Decoys and Missiles
• Missile Destroyers, Stealth Frigates and Submarines, Warships, Landing Craft Utility, Corvettes, OPVs, Fast Patrol Boats etc.
• Avionics, Weapons Systems, Electronic Warfare and Naval Systems, Radars, etc.
• Multi-role Fighters, Hawk Advanced Jet Trainer, Light Combat Aircraft (LCA), Light Transport Aircraft, Helicopters, etc.
• Electronic Warfare Systems, Radars and Avionic Systems, Communication Systems
• Optical Goods, Navigational Instruments, Night Vision Devices
• Logistic & Armoured Vehicles
• Rocket Launchers, Sensors, Simulators, Ammunition Hardware, Mechanical Fuses
• Protection Equipment, Safety and Ballistic Products
The Government of India has introduced the Innovation for Defence Excellence (iDEX) Scheme to steer the Defence Industry towards self–reliance.
iDEX aims at the creation of an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging industries including MSMEs, individual innovators, R&D institutes & academia.
Coupled with DISC (Defence India Startup Challenge), iDEX provides grants/funding and other support to carry out R&D, creation of Prototypes and Commercialization.
The Technology Development Fund (TDF) encourages participation of public/private industries, especially MSMEs and Startups, to create ecosystem for enhancing cutting edge technology capability in the Defence sector.
India accounts for 3.7% of the global military spending, making it the third highest military spender in the world. The Defence expenditure constituted 2.9% of India's total GDP with approximately US$72.9 billion spent on defence in 2020.
Thus with its own domestic market a huge and attractive one, and already a recognisable Defence exporter, India is set to continue growing rapidly into the super powerhouse it is destined to be.
Further information can be obtained from the following Government of India websites:
(a) https://www.mod.gov.in/
(b) https://www.ddpmod.gov.in/
(c) https://www.makeinindia.com/sector/defence-manufacturing
(d) https://www.drdo.gov.in/
(e) https://www.indianarmy.nic.in/site/formTemplete/frmTendor.aspx?MnId=/dslWs+YRV+Izr4tSXPdNA==&ParentID=FSqNZ7Ylkkh985w/0I2Csw==
(f) https://indiannavy.nic.in/tenders
(g) https://indianairforce.nic.in/capital-procurement
(h) https://eprocure.gov.in/cppp/
(i) https://www.defproc.gov.in/nicgep/app
(j) https://defenceinvestorcell.gov.in/
(k) https://www.investindia.gov.in/