What is the issue?
- A defence-expo has been planned at Chennai to demonstrate Indian defence systems and components to the world.
- But for the domestic defence industry to prosper, the Indian government must step-up procurement of indigenously made ammunitions.
How does India’s procurement landscape look?
- The four-day Def-Expo India in Chennai expects to ambitiously position India as an emerging defence manufacturing hub in the world.
- It seeks to brand India as an exporter of defence systems and components and showcase strengths of the country’s public sector.
- Such objectives appear a bit cheeky as India is the world’s top importer of arms and does not figure among the top 25 exporters of arms.
- Yet, indigenisation of defence procurement is critical not just for strategic reasons but also for the success of the ‘Make in India’ mission.
- India accounted for 12% of total global arms imports in the past 4 years
- Of the total Indian imports, Russia accounted for a whopping 62%, followed by the US (15%), Israel (11%) and France.
- The sheer size of the Indian defence procurements makes India a major market for major defence firms across the world.
How does our domestic defence industry fare?
- India spends a third of its defence budget on capital acquisitions and about 60% of the defence related requirement is met through imports.
- Thus, the opportunity to increase domestic procurement is large, which needs to be capitalised by the domestic PSUs like HAL and the private players.
- Notably, companies like Hindustan Aeronautics Ltd (HAL) have demonstrated technological mettle in producing high quality equipments like Tejas aircraft.
- PSU shipyards like “Mazagaon Dock Shipbuilders” among others have demonstrated their ability to design and build naval vessel and submarines.
- India is in fact one of the few nations with capabilities to design and build massive warships and high-tech submarines.
- The country also has the capacity to build tanks, guns, rockets and missiles – thereby covering most of the equipments needed.
What is the way ahead?
- In contrast to India’s rising imports of arms and equipment, China had reported a 19% drop in overseas purchases between in recent years.
- It has emerged the 5th largest exporter of arms, accounting for 4.6% of the global arms export market.
- For Indian to emulate China’s success in defence manufacturing, the government needs to demonstrate willingness to procure domestically.
- Hence, the Union government needs to be ready to place large orders with the indigenous manufacturers both in the public sector and private.
- Strengthening partnerships with international players for technology transfers is indeed a positive for enhancing domestic product competence.
Source: Business Line
