DefExpo 2018: Govt to boost defence manufacturing, says Narendra Modi
Speedy grant of manufacturing licences, simpler FDI rules and two defence industrial corridors are aimed at boosting defence manufacturing in India, says PM Narendra Modi at DefExpo 2018
New Delhi: India is a land of peace but it is the state’s responsibility to protect its citizens and the government will take all steps needed to equip India’s armed forces including through the establishment of a strategically independent defence industrial complex, Prime Minister Narendra Modi said on Thursday.
In his speech to the 10th edition of the four-day-long DefExpo 2018, a biennial event organized by the Indian defence ministry, Modi outlined the steps taken by his government to open up defence manufacturing to private sector companies, including the speedy grant of licences for manufacturing and exports, easing of rules allowing for foreign direct investment in the sector as well the setting up of two defence industrial corridors to boost production of critical and new equipment.
India is a leading importer of arms and military platforms globally and the current Bharatiya Janata Party-led National Democratic Alliance (NDA) government has been laying emphasis on the indigenization of defence manufacturing. One of the goals of the Modi government is to ensure a revenue of Rs1.7 trillion in military goods and services by 2025 by promoting the domestic defence industry.
“Our dream is to develop the ecosystem to foster an environment of new and creative entrepreneurship in the defence manufacturing sector,” Modi said to a gathering of defence industry representatives from the private and public sector representing some 500 Indian companies and 150 international firms.
“And for this, in the weeks ahead, we will undertake extensive consultations with all stakeholders, including both Indian and foreign companies, about our defence production and defence procurement policy space,” he said. “I call upon all of you to actively participate in this exercise. Our aim is not just to discuss, but to draw the right lessons. Our intention is not to lecture, but to listen. Our goal is not merely to tinker, but to transform,” the prime minister said.
The tagline of the DefExpo this year is “India: The emerging defence manufacturing hub,” showcasing India’s hopes to brand itself as an exporter of defence systems and components. India’s defence production has increased from Rs43,746 crore in 2013-14 to Rs55,894 crore in 2016-17, according to defence ministry figures.
One of Modi’s stated aims since taking office in May 2014 has been to turn India into a manufacturing hub which in turn dovetails with the BJP-led National Democratic Alliance government’s plans to ensure employment to millions of Indians entering the workforce each year as well as boost economic growth in Asia’s third largest economy. The announcement of two defence industrial production corridors in the annual 2018-19 budget – one in Bundelkhand, straddling Uttar Pradesh and Madhya Pradesh, and the second in linking Chennai in Tamil Nadu and Bengaluru in Karnataka, passing through Coimbatore, is aimed at bringing to fruition this plan.
In his speech, Modi also slammed the previous Congress-led United Progressive Alliance government for its policy paralysis which he said had delayed several critical defence procurements and compromised preparedness. The previous government had been seen as slow in giving its nod for critical purchases and had been mired in a series of corruption scams that had retarded its decision making.
“There was a time when, like many other aspects of governance, the critical issue of defence preparedness was also hampered by policy paralysis,” Modi said, adding “We have seen the damage such laziness, incompetence or perhaps some hidden motives, can cause to the nation.”
“Issues that should have been long addressed by previous governments, are being resolved now,” he said, pointing to the government’s move last week to begin the acquisition of 110 fighter jets for the Indian Air Force (IAF) in a bid to shore up its fast-depleting squadron strength. This is the first big procurement initiative for fighter jets after the NDA government scrapped the process to acquire 126 medium range multi-role aircraft for the IAF around five years ago. Following scrapping of that deal, the NDA government in September 2016 signed a euro 7.87 billion (approx Rs 59,000 crore) deal with the French government for the purchase of 36 Rafale twin-engine fighter jets. On its part, the Congress says that the deal negotiated under its rule was much cheaper than the contract signed by the Modi government to procure the Rafale jets.