Sunday, August 7, 2022

Defence production policies aim paradigm shift in Defence manufacturing

Must read

New Delhi: (Defence News) In the recent past, the Ministry of Defence has issued multiple policy drafts for transforming India into ‘Atmanirbhar Bharat’ in defence manufacturing. In July the Ministry of Defence issued the second draft of Defence Acquisition Procedure (DAP) which had a series of proposals. In the beginning of this week, the ministry has finalised the Defence Production & Export Promotion Policy, (DPEPP) 2020. Among the most common features of both these drafts and also the central idea is the push to achieve self-reliance in the defence manufacturing sector. India for a long time has been heavily dependent on the import from foreign countries to fulfil its defence needs.

'Do not import what you can manufacture’

The defence industry has witnessed a galore of promises in these draft policies. The draft DAP proposes a ban on import of certain weapons which can be manufactured in India. The list of such weapons is yet to be notified. “A negative list of weapons/platforms would be notified with year-wise timelines for placing an embargo on the import of such items from those dates,” the DPEPP draft issued earlier this week mentioned. “This list would be updated periodically, without compromising on the operational requirements of the Services, to allow lead-time to industry to prepare itself for any such procurement which is likely to come up, subsequent to the indicated embargo date,” it added.
Brigadier Rumel Dahiya (Retd.), who was the Deputy Director General at the Manohar Parrikar institute for defence studies says that given the potential that India has, these goals look achievable. “It is clear that the way we are managing things at the moment is not fetching us the desired results, however, the recent policies issued by MoD aims at solving the structural problem in the Indian defence sector,” he said speaking to Defence Watch.

The leasing option

Citing the paucity of funds for capital acquisition the DAP has introduced a new provision of ‘Leasing,’ which would allow the defence forces to take the equipment from defence firms or countries on lease rather than purchasing them. Also, DPEPP has identified focus areas which include procurement reforms, support to MSMEs, innovation and R&D, corporatization of OFBs and export promotion among others.

The greater contribution of Private sector is important

The size of the Indian Defence Industry, including Aerospace and Naval Shipbuilding Industry, is currently estimated to be about Rs 80,000 crore. While the contribution of Public Sector is estimated to be Rs 63,000 crores, the share of Private Sector is merely Rs 17,000 crores. Brig. Dahiya says India needs to create an ecosystem that yields greater contribution from the private sector. “For any defence policy to be successful, India will have to encourage private players in manufacturing. Though there are certain problems associated with this idea, for instance, shrinking defence budget and the lack of orders it can be addressed through the government’s assurance of bulk orders” he said.

Moreover, DPEPP aims to “To achieve a turnover of Rs 1.75 Lakh Crore including export of Rs 35,000 crore from in Aerospace and Defence goods and services by 2025.” Notably, the size of India’s defence manufacturing currently stands at Rs. 80,000 crores and its export are around Rs. 10,000 crores. Post-2014, govt has been extremely aggressive on the defence manufacturing front. If the will is the first step towards accomplishment, then the government is moving in the right direction. “Unless India has consistent policies and its proper implementation on the ground, it will be impossible to become self-reliant,” Brig Dahiya cautions though.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)

- Advertisement -

More articles

- Advertisement -

Latest News