How the Budget can add more firepower to India’s defence manufacturing

A country that depends on imports for its defence equipment can never be strong. Therefore, being self-sufficient in the defence sector is very important and it is linked to the ‘self-respect’ and ‘sovereignty’ of our country. This has long been the sentiment of our Defence Minister and the corridors of Indian Ministry of Defence (MoD).

While the government has taken a number of constructive measures to actualise its dream of an ‘Aatma-nirbhar Bharat’, a lot still needs to be done before we can claim the coveted title of a defence manufacturer.

In order for an industry to flourish, it is pertinent to strengthen and develop private industry while ensuring that public and national security interests are not compromised. When it comes to defence manufacturing, Government’s reliance on Public Sector Undertakings (PSUs) to be the flagbearer of capabilities in the sector needs to be realigned. The capabilities of Public and Private sector need to be integrated, developing this into a strategic partnership for achieving self-reliance in defence production.

Major steps in that direction were taken during the policy changes which were announced in the last 18 months including increase in foreign direct investment limit to 74 percent under the automatic route, a list of reserved items to be sourced from India only and other important changes in the Defence Acquisition Procedure (DAP) 2020.