The negative list of embargoed defence items is one more step towards creating a strong domestic arms industry and making India self-reliant in defence production.

Although the new measures announced to fast-track the defence sector are significant, they do not add up to a comprehensive and overarching reforms package.

The government’s decision to allow the private sector to undertake the development of complex defence equipment is a step in the right direction. It will help forge a larger innovation system to meet the diverse requirements of national security. However, caution may be required to avoid duplication of efforts and prevent indirect import.

The government seems to have little fiscal space for accommodating the demand of the armed forces for additional funds, given its quantum on the one hand and the state of its revenues on the other which are already quite stressed.

As a corporatised entity, the OFB will be in a far better position to respond to the market dynamics and face the competition effectively.

The agile acquisition or C2D2 model currently under adoption by the US for its F-35 aircraft is likely to become a necessity for acquisitions in future, as disruptive defence technologies will continue to affect military systems across the world.