Defence Production

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  • Defence Technology Indigenisation: Need to go beyond Lip Service

    Though public-private partnerships is encouraged, privately the government continues to retain its monopoly on research and development and defence production through the DRDO, the ordnance factories and the defence PSUs.

    September 19, 2013

    Future Challenges for Quality Assurance (QA)

    In order to achieve self reliance in defence production, enhancement of indigenous private industry’s role in R&D of defence systems is inevitable. Accordingly, amendments to the DPP-2011have been approved. Along with all other stakeholders, the DGQA too needs to gear up for the challenges this new policy is going to present.

    May 28, 2013

    Amendments to DPP-2011: An Analytical Overview

    On April 20th, the Defence Acquisition Council (DAC) of the Ministry of Defence announced 15 major amendments to the defence procurement and production policies, with the hope to incentivise indigenous defence manufacturing while promoting transparency and efficiency in the procurement process.

    May 06, 2013

    A new dawn for defence production in India

    Defence acquisitions are always much debated and scrutinised. The criticism ranges from a lack of direction in procurements to needles procedural complexities and from corruption in defence deals to bureaucratic apathy. The Defence Acquisition Council, chaired by the Defence Minister, has taken some bold and much needed decisions on April 20, 2013 in an attempt to address some of these issues.

    May 06, 2013

    LAAD Exhibition: Showcase of Brazilian Self-Reliance

    Like many other developing counties, Brazil also believes in self-reliance in arms manufacturing and has articulated comprehensive national defence policy with a strong support of its armed forces. There could possibly be some lessons for India.

    April 25, 2013

    Defence Production Policy 2011: Need for Reinvigoration

    A thorough and honest review of the progress made so far is essential for arresting the drift in the Defence Production Policy and for course correction.

    October 25, 2012

    Bharath Kumar asked: How is the indigenisation of defence production going on?

    Laxman Kumar Behera replies: India’s tryst with indigenisation of defence production has so far not yielded the desired result. This is reflected in the country’s huge arms import which runs into billion of dollars every year. According to US Congressional Research Service (CRS), India ranks third among the developing country, with total arms import valued at US$ 14.2 billion between 2002 and 2009. The heavy import dependency, which is now around 70 per cent, has promoted the Union Defence Minister to describe it as “shameful and dangerous,”

    Notwithstanding, the low level of indigenisation the Ministry of Defence (MoD) has taken several key measures, to revitalise the domestic defence industry. Through continuous revision of procurement procedures, the MoD has created more opportunity for the domestic industry to supply various items to the armed forces. Since 2001, the MoD has allowed the domestic private sector to participate fully in defence production. It is expected that the various reform measures taken so far and the on-going debate on initiating more reform measures, such as those pertaining to FDI in defence industry and creation of certain ‘Champions’ in the domain of private sector, etc, will bear fruit in the coming years.

    Kovid Kumar asked: Why should not we encourage to our private sector to defence production rather than we enhancing our dependence on foreign industries?

    Laxman Kumar Behera replies: The government has in fact taken several measures to bring in the private sector and encourage them in defence production. In 2001, the government liberalised the defence industry, by allowing up to100 per cent participation by private companies in defence production and also allowed foreign direct investment up to 26 per cent. In DPP-2006, the Ministry of Defence introduced an offset policy to leverage India’s huge arms imports towards strengthening domestic industrial capability. In addition, the government has tried to revise its procurement procedures to create more space for the domestic companies to participate in defence production. The ‘Make’ category and the recently announced ‘Buy and Make (Indian)’ provide significant scope for domestic industry, including the private sector, in assuming the role of big system integrator.

    Although the government has so far tried its best to involve the private sector in defence industry, there are still few areas of concern that limit its greater involvement in defence production. These concerns are mainly in the form of government’s ‘favouritism’ towards its own enterprises, limited scope for attracting foreign technology, and government reluctance in announcing Raksha Udyog Ratnas (RURs). These concerns need to be addressed so as to create a vibrant defence industry in India, which could lead to higher self-reliance in defence production.