For past many years India has been one of the largest importer of military hardware to cater the needs of its forces and due to this very reasons our Armed Forces has also suffered a lot in the past as whenever any emergency situation arises our ministers used to go on a shopping spree to different western nations leading to a loss of invaluable time and resources. All these problems are caused because of the following problems:
- Strict restrictions on entry of new entrants or private players by the government and market forces.
- Monopoly enjoyed by the Defence Public Sector Undertakings (DPSU) because of their access to resources and decision makers.
- Reluctancy by the forces to give order to the indigenous manufacturer due to past experiences.
- Slow pace of any capital procurement process.
- Years of capital-intensive R&D on new weapon technology.
With the new Government at helm and sustained effort for years India Defence Industry is finally seeing the daylight getting the required attention to redress the core concerns of the private players to provide a level playing field to all the participants. The steps taken in this direction are well considered and has the acceptance of everyone few of them are mentioned below:
Introduction of Strategic Partnership Model: Strategic Partnership refers to selection of private sector partners, based on a laid down procedure, by the MoD to long term investments in manufacturing infrastructure, an eco-system of suppliers, skilled human resources, R&D for modernization and upgrades as well as and other capabilities, besides production of equipment. The Strategic Partnership model is being implemented to enable participation of private Indian firms in Make in India in defence. The SP is expected to play the role of a System Integrator by building an extensive eco-system comprising development partners, specialised vendors and suppliers, in particular, those from the MSME sector.
Embargo on imports of Defence Equipment: In a major reform initiative to boost the domestic defence industry, Defence Minister Rajnath Singh on 9th August 2020 announced restrictions on import of 101 weapons and military platforms, including artillery guns, assault rifles and transport aircraft. The Ministry of Defence (MoD) has prepared a list of 101 items for which the embargo on imports is planned to be progressively implemented between 2020 and 2024.
Bifurcation of Capital Procurement Budget: MoD has also bifurcated the capital procurement budget for 2020-21 between domestic and foreign capital procurement routes. A separate budget head has been created with an outlay of nearly Rs 52,000 crore for domestic capital procurement in the current financial year. This reform will provide the weapon manufacturer an assurance from the government side.
Awarding Contracts to Private Sector: In the recent past we have also witnessed the participation and awarding of defence manufacturing contracts to the private sector players showing the faith that armed forces has placed on indigenous products and solutions.
Public-Private-Partnership (PPP) Model: Implementation of Public Private Partnership Model is also a boon for our defence and aerospace industry as it helps to meet the deadline and maintain the quality of equipment by increasing the speed of quality production. Hence, looking at the all-round and holistic approach taken by the Government ,in consultation with the Armed Forces, to strengthen the defence ecosystem of the country and transforming in from leading weapon importer to weapons manufacturer by provide the sincere effort and investment, the Government is trying to create a lot of growth opportunity in various sectors of economy be it service sector, finance sector or MSME sector and for Start-ups .