Self-Reliance in Defence Sector

The government has implemented a number of reforms and legislative efforts over the past few years to stimulate domestic design, development, and production of defence equipment, thereby encouraging self-reliance in the nation's defence industry & technology.

Steps taken by the government:

• Process for industrial licencing has been streamlined with a longer term of validity
• Foreign Direct Investment (FDI) policy liberalisation permitting 74% FDI via automatic route
• The Innovations for Defence Excellence (iDEX) programme was launched with the participation of startups and micro, small, and medium-sized businesses (MSMEs)
• SRIJAN, a new indigenization portal launched to help Indian businesses, primarily MSMEs, indigenize
• Creation of two defence industrial corridors, one in each of Tamil Nadu and Uttar Pradesh
• Progressive growth in defence budget allocation Military modernization spending plan for domestic purchases

Note

• The proportion of domestic purchases in total purchases has been increasing. Domestic purchases made up 54% of all purchases in 2018–19; this percentage increased to 59% in 2019–20, and to 64% in 2020–21. This year, it has been increased to 68%, with 25% of the budget designated for purchases from private businesses.

Why should India focus on self-reliance in the defence sector?

• Even if India aims to have an economy worth $5 trillion, it is clear that it has many gaps in its national security.
• For important military inventory products, there is a glaring high dependency index on foreign suppliers (traditionally the former USSR, now Russia).
• This reliance creates a large-scale national vulnerability and weakens India's pursuit of real and respectable strategic autonomy.
• Additionally, the current fighting capacity gaps highlight India's weaknesses in defending its key national security interests.
• In the previous five years, India's defence exports have increased eight-fold.
• More than 75 countries throughout the world are recipients of Indian exports of defence goods.

Various challenges:

• World issues: Unforeseen occurrences, such as the Russian invasion of Ukraine, as well as other elements, such as the COVID, which impacted the world economy and its supply lines.
• Rupee depreciation: The difficulties experienced by the Indian defence industrial ecosystem are made worse by the global difficulties, which are already complex.
• Production: Over the past 50 years, South Korea and China have shown that their countries are skilled at industrial design and manufacturing, but India has missed the bus.
• The design and production of semiconductor chips have become the new standard for measuring economic growth and military might thanks to technological advancements.
• India has yet to develop a profile that would be considered pertinent in this field, where the US and China are now embroiled in fierce competition.
• Lack of essential Technologies: The indigenous manufacturing is hampered by a lack of design expertise in critical technologies, insufficient R&D funding, and the inability to produce significant subsystems and components.
• There is very little interaction between the R&D establishment, production organisations (public or commercial), and end users.
• Lack of Coordination: India's capacity for defence manufacturing is hampered by the Ministry of Industrial Promotion's and the Ministry of Defence's conflicting responsibilities.

Steps to Follow:

• Mandatory Disclosure of Technology for Subsystems: When India purchases any weapon systems, there must be a plan in place for the ultimate production of ammunition and replacement parts in India. This will save us from needing to import supplies on short notice during emergencies.
• The same is true of facilities for repairs, upkeep, and overhauling armament platforms.
• Exporting weapons of defence: When a transparent policy is used to open the door to defence exports, investment—whether Indian or foreign—will be viable.
• Conflict of Interest: The DRDO's position as the government's sole adviser, developer, and technology evaluator creates a conflict of interest that prevents private players from participating.

Way Forward

• Effective defence capabilities, maintaining national sovereignty, and achieving military superiority all depend on self-reliance in defence production.
• Achieving this will guarantee strategic independence, affordable defence gear, and could result in savings on the cost of defence imports, which can then be used to fund the nation's physical and social infrastructure.
• The utmost objective in the national policy discussion should be to gradually alter this techno-strategic landscape in India's favour.
• This will present an opportunity to increase employment in India, which will raise the economy's growth indicators.