The Stockholm International Peace Research Institute (SIPRI) reported that India was the world’s second-largest importer of major arms in 2014-18, third largest military spender in 2021 and accounted for 9.5% of the global total and India’s military expenditure rose by 3.1% .
The Government has taken several policy initiatives in the past few years under ‘Make in India’ program and brought in reforms to encourage indigenous design, development and manufacture of defence equipment in the country, thereby reducing import of defence equipment. These initiatives include :
- According priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020.
- Announcement of 18 major defence platforms for industry led design & development (The defense platforms involve the integration of several concepts that are used for design of weapons, support equipment, and automobiles that are essential to the military-based operations of a country.) Some of them include crucial technologies like the Hypersonic Glide Vehicle for Hypersonic missiles, Fast UAVs etc.
- Notification of two ‘Positive Indigenisation Lists’ of total 209 items of Services and two ‘Positive Indigenisation List’ of 2851 items and 107 Line Replaceable Units (LRUs) respectively, of Defence Public Sector Undertakings (DPSUs), for which there would be an embargo on the import beyond the timelines indicated against them;
- Simplification of Industrial licensing process with longer validity period;
- Simplification of Make procedure (The ‘Make’ category of capital acquisition is the cornerstone of the Make in India initiative that seeks to build indigenous capabilities through the involvement of both public and private sector. ‘Make-I’ refers to government-funded projects while ‘Make-II’ covers industry-funded programmes. Make-I involved in development of big-ticket platforms such as light tank and communication equipment with Indian security protocols. Make-II category involves prototype development of military hardware or its upgrade for import substitution for which no government funding is provided. The five projects approved under the industry-funded Make-II procedure are simulators for Apache attacks helicopters and Chinook multi-mission choppers, wearable robotic equipment for aircraft maintenance, autonomous combat vehicle and integrated surveillance and targeting system for mechanised forces.)
- Liberalisation of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route;
- Launch of Innovations for Defence Excellence (iDEX) scheme involving start-ups & Micro, Small and Medium Enterprises (MSMEs); iDEX aims to achieve self – reliance and foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, start-ups, individual innovators, R&D institutes and academia. iDEX has partnered with leading incubators in the country to provide handholding, technical support and guidance to the winners of iDEX challenges.
- Implementation of Public Procurement (Preference to Make in India) Order 2017;
- Launch of an indigenization portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs; Around 20,000 defence items, which were earlier imported, have been uploaded on the portal for indigenization.
- Reforms in Offset policy with thrust on attracting investment and Transfer of Technology for Defence manufacturing by assigning higher multipliers; and
- Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu.
The superpower ambition, growing complexity of security challenges in India’s neighbourhood and to safeguard economic power (India poised to become a $5 trillion-dollar economy by 2025) India requires strong defence capabilities. Establishing an industrial base supporting defence indigenization would give India a strategic advantage and establish it as a strong defence power in times to come.