Indian defence manufacturing is all set to undergo a radical shift. As part of the government’s ambitious Make in India initiative, priority will now be given to defence equipment that is indigenously designed, developed and manufactured.
Not just “Make in India”, the focus is now also “Design in India” — this will ensure that the intellectual property rights stay with the country.
It is hoped that this move will also encourage an R&D eco-system within the country. As a further incentive to local organisations, the department of defence production will subsidise up to 90 percent of the design and development costs.
Defence Minister Manohar Parrikar made the announcement that under these new rules, at least 40 percent of the components of indigenously-designed equipment should be from India. In the case of non-indigenous designs, this rises to 60 percent.
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This initiative also has a strong focus on small- and medium-scale industries. The defence minister said that up to Rs. 10 crore has been earmarked for such companies.
“I will try to ensure that at least 30% of our procurement is sourced from them. Defence public sector companies have been instructed to source as much as possible from small and medium industries,” he said to NDTV.
The proposed defence procurement policy will also increase the offset threshold for defence deals to Rs. 2000 crore. This is aimed at making it easier to do business with single vendors, and will ideally encourage businesses in India over companies overseas.
A special committee will also be formed to arbitrate procurement deals.
India has recently increased defence spending; in his tours to foreign nations (and in discussions with defence technology companies such as the American Lockheed Martin), Prime Minister Narendra Modi has also been emphasising how defence manufacturing will see a shift towards India. As a result, equipment such as Russian Kamov helicopters and artillery guns will soon be manufactured in India.