Defence

Yes, Indian Military Can Go the ‘Make in India’ Way – Just Not Yet

With the COVID-19 pandemic eviscerating the Indian economy, the government recently announced a stimulus which also contains a defence ‘Make in India’ (MII) package. The measures include:

  1. increasing the FDI percentage in defence manufacturing
  2. a negative list for imported weapons
  3. separate budget for Indian-made military equipment
  4. corporatisation of the Ordnance Factory Board (OFB)
  5. reform of defence procurement

The ‘Make in India’ programme is primarily being impelled by the imperative to reduce arms import bills and ‘optimise’ defence expenditure – India’s FY2019 defence budget of USD 71.1 billion was the highest in South Asia and the third-highest in the world, and for the past five years, it has been the world’s second largest arms importer.

‘Make in India’ in Defence Sector: A ‘New’ Idea?

The ‘Make in India’ notion, however, is not new. In 1990, India had called for achieving 70 percent self-reliance in defence. PM Modi, in his first address from the Red Fort (15 August 2014), espoused a ‘Make in India’ package of ‘satellites to submarines’ – the Defence Production Policy of 2018 stipulates that by 2025, India must achieve self-reliance in producing major platforms, as also export arms worth USD 5 billion (FY2016 defence exports: Rs. 1,495 crore).

But there are systemic reasons as to why the programme has not witnessed substantial traction, some of which have been already outlined in various publications.

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