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Rajnath urges private sector to take part in defence manufacturing

Rajnath Singh emphasised the need to reduce dependence on imports, and asked private sector to develop capabilities in defence sector
New Delhi: While emphasising the need to progressively reduce dependence on foreign manufacturers, Union Defence Minister Rajnath Singh urged the private sector on Tuesday to indigenously develop comprehensive capabilities in the defence sector. Delivering the inaugural address at the seminar on ‘Modernisation and Indigenisation plans of the Indian Air Force’ in New Delhi, Singh urged the private industry to take advantage of the policy initiatives of the government and engage with defence services, defence public sector undertakings (DPSUs) and Ordnance Factory Board (OFB) for meeting their indigenisation demands.

‘Invest for long-term gains’

He reiterated the government’s commitment to resolving any outstanding issue in the way of the growth and development of indigenous industries. He asked the industry not to expect any short-term returns but invest for long-term gains. Singh described the Indian Air Force as a technologically advanced and extremely potent force, saying that the recent offensive against terror outfits in our neighbourhood speaks volumes about the reach and lethality of the formidable arm of the Armed Forces. Indian Air Force, besides Army and Navy, needs to keep pace with the advancements in technology for enhancing operational capabilities, he added. Recalling Prime Minister Narendra Modi’s call to modernise our Armed Forces, Singh said efforts are being made to increase the participation of the private sector in ‘Make in India’ in the defence sector.

‘Numerous opportunities in defence sector’

Listing out the government’s initiatives to promote ‘Make in India,’ the minister said foreign investment up to 49 percent was allowed through automatic route and up to 100 percent under government route on a case-to-case basis. He urged foreign Original Equipment Manufacturers (OEMs) to establish manufacturing facilities in India adding that a number of opportunities are available to foreign companies through FDI, joint ventures or the defence offset route. Singh also said the process of defence offset implementation has been streamlined and one of the major demands of the industry to reinstate the provision of services for the discharge of offsets has now been provided. The defence minister announced approval for use of test facilities of government entities for the private industry to meet the best quality standards required for defence manufacturing. He said a decision to this effect has been taken after incorporating the comments of the stakeholders, particularly indigenous defence manufacturers. Singh expressed hope that the synergy between government’s efforts and industry participation will help fulfil the long-cherished dream of making India a frontrunner in defence production.

Rulebook to usher in private sector is ready

Singh added that comprehensive outsourcing and vendor development guidelines for DPSUs and OFB to promote the participation of private sector, particularly MSMEs in defence production, have been worked out. He said indigenisation requirements of Hindustan Aeronautics Limited (HAL), OFB, DPSUs, Army, Air Force and Navy have also been hosted on Ministry of Defence (MoD) website for benefit of the private industry. He said that the defence products list for issuing industrial licenses under Industry Development and Regulation (IDR) Act has been revised, adding that it has reduced the entry barriers for the industry, especially the small and medium segment. The initial validity of industrial license has been increased from three years to 15 years with a provision to further extend it by three years on a case-to-case basis, he added. Singh also referred to the Technology Development Fund (TDF) Scheme which has been established under the aegis of Defence Research and Development Organisation (DRDO) to promote self-reliance in Defence Technology as part of ‘Make in India’ initiative. He said the scheme will encourage the participation of public/private industries especially MSMEs so as to create an ecosystem for enhancing cutting edge technology capability for defence application.