Why is India gunning for more defence production?

ANALYSIS
Why is India gunning for more defence production?
Indian defence minister Rajnath Singh addresses a webinar on India-Sweden industry cooperation. Technology-centric FDI policy will enable Indian industries to collaborate with Swedish industries in the field of niche and proven military technologies.Courtesy: ANI

Indian Defence Minister Rajnath Singh invites leading Swedish defence majors to set up manufacturing bases in India to produce military equipment and platforms.

Indian Defence Minister Rajnath Singh’s invitation to leading Swedish defence majors to set up manufacturing bases in India is yet another shining example of showcasing the country as an attractive destination for investment to produce military equipment and platforms.

Addressing a conference on India-Sweden defence industry cooperation, Singh said the government has rolled out a series of reforms to help the defence industry serve not only Indian requirements but also meet global demands. The defence minister cited the 74 per cent foreign direct investment (FDI) through automatic route and up to 100 percent through government route in the defence manufacturing sector as examples.

"Over the past few years, the Indian defence industry has been galvanised through progressive policy and procedural reforms which have catapulted the industry to serve not only Indian requirements but also meet global demand," Singh said at the virtual conference.

According to Indian defence officials, the technology-centric FDI policy will enable Indian industries to collaborate with Swedish industries in the field of niche and proven military technologies.

Making acquisitions faster

The ministry has also taken recent measures to make the defence acquisition simpler and faster.

India’s Defence Acquisition Council (DAC) last week approved proposals for capital acquisitions of the various equipment required by the Indian Armed Forces, including the procurement of air defence guns and ammunition made in India. To better equip the Armed Forces for operational challenges and to facilitate faster induction of required arms and ammunition, the DAC extended the timelines for progressing urgent Capital Acquisitions under delegated powers to the Armed Forces until August 31, 2021. “This will allow the Armed Forces to complete their urgent and critical acquisitions,” the defence ministry said.

Swedish firms such as SAAB already have a major presence in India and I am confident that other Swedish firms will find India as a major investment destination for defence manufacturing.
- Rajnath Singh, Indian defence minister

“The Indian Army had a long-standing need for modernization of its air defence guns. Previously, these could only be obtained from foreign sources. With the continued thrust of the Ministry of Defence towards ‘Atma Nirbhar Bharat' and ‘Make in India,’ an enthusiastic response from about a dozen Indian companies was received,” the ministry said in a statement. “All of them have expressed their willingness and commitment to manufacture this complex gun system and associated equipment by ensuring technology assimilation in India,” the statement added.

RFP for submarines

Another significant decision taken by the DAC was the issuance of a Request for Proposal (RFP) for the construction of six conventional submarines under Project-75.

According to Singh, the proposals for Swedish manufacturers must also be seen in the same light. Foreign OEMs (Original Equipment Manufacturers) can set up manufacturing facilities individually or in partnership with Indian companies through joint ventures or technology agreement to capitalise on the 'Make in India' initiative, he said.

"Swedish firms such as SAAB already have a major presence in India and I am confident that other Swedish firms will find India as a major investment destination for defence manufacturing," he said. "There is a lot of scope for Sweden and Indian defence Industries for co-production and co-development. Indian industry can also supply components to Swedish industries," he added.

With India’s vast defence industrial base of 41 ordnance factories and nine defence public sector undertakings, the expanding footprint of private industries and foreign investors is only bound to add to the eco-system of over 12,000 enterprises in making the mission of 'Self-Reliant India' a complete success for the sector.

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