He points out that India had been a major defence importer for many years
India has the capability to become a reliable weapons supplier to friendly nations and it will consolidate its position as the net security provider in the Indian Ocean region, Prime Minister Narendra Modi said on Thursday, highlighting Atmanirbharta in defence manufacturing, at a webinar.
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“For the first time, 74% Foreign Direct Investment (FDI) in defence is allowed through the automatic route… We are going forward with the process of corporatisation of the Ordnance Factory Board (OFB),” he said
Listing a series of measures that were recently announced to boost domestic defence manufacturing, he said the aim was to develop new indigenous technologies. Several measures such as simplified licensing field, level plating field and simplifying exports have been taken.
Mr. Modi pointed out that India had been a major defence importer for many years. Post Independence, there was lot of capability for defence manufacturing but it was unfortunate that it did not get the attention it desired. “That situation is changing now,” he noted.
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Chief of the Defence Staff (CDS) Gen. Bipin Rawat said they have started receiving requests from various countries. For instance, radars were very much in demand as well as artillery support systems.
Corporatisation of OFB
Defence Minister Rajnath Singh said the corporatisation of the OFB would be done within a year. “We have earmarked a portion of our defence budget for procurement only from the domestic industry. For this year, it will be ₹52,000 crore,” he added.
The government recently issued a draft Defence Production and Export Promotion Policy (DPEPP) 2020 for public feedback with the aim to achieve a manufacturing turnover of $25 bn or ₹1,75,000 crore, including exports of $5 bn in aerospace and defence goods and services by 2025.
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Mr. Modi said the government had undertaken reforms in the toughest sectors like Intellectual Property (IP), taxation, insolvency and bankruptcy and even in space and atomic energy. For foreign Original Equipment Manufacturers (OEM) too, producing in India would be the best option.
On defence infrastructure, he said work was on in the two defence industrial corridors in Uttar Pradesh and Tamil Nadu and a target of ₹20,000 crore investments had been set for the next five years.
On the 101 items’ negative import list announced recently Mr. Modi stated that these items had been reserved for domestic industry and it “will be expanded in future.”
More items in coming lists
On this, Gen Rawat said that by early next year, they would come out with the second list, where there would be more technologically advanced items. The number would be even more than this and the lists were also going to increase. “If the aerospace industry can find its feet in India, putting aerospace in the negative list will be a big achievement,” he claimed.
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Reiterating support for domestic defence equipment, Gen. Rawat said, “At times, we are somehow incorrectly perceived to have an import bias. Nothing could be further from the truth than that.”
The draft DPEPP has also set a target to double the procurement from domestic industry within the overall defence procurement from the current ₹70,000 crore to ₹1,40,000 crore by 2025.
On level playing field for the private industry, Mr. Rajnath Singh said, “We cannot achieve the goal of Atmanirbhar Bharat without giving level playing field to the private sector.”
Tender for submarines
On the ongoing naval tender for six advanced submarines under Project-75I, being processed through the Strategic partnership (SP) route, Defence Secretary Ajay Kumar said the Request For Proposal (RFP) was in the final stages of legal vetting and would be issued once done. The selection of the strategic partner should happen this year itself. The selection of the Indian SP partner and the OEM was over.
Also Read | Draft Defence Production & Export Promotion Policy issued
Procurements under the SP policy were open for both the private and the public sector. The SP was originally meant for the private sector, he added.
Secretary, Defence Production, Raj Kumar, clarifying an important aspect, said that as per definition, any foreign company registered in India, even if it was a subsidiary of a foreign company, would be considered an Indian vendor.
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