Defence production hit record high of nearly ₹1.27 lakh crore in 2023-24: Defence Ministry
- In a significant development reported by The Hindu, India's defence production for the financial year 2023-24 has reached a historic high of ₹1,26,887 crore. This marks a notable increase of 16.7% from the previous year's ₹1,08,684 crore, according to the Ministry of Defence. This surge underscores India's ongoing efforts towards bolstering indigenous defence manufacturing capabilities, reducing dependency on foreign imports, and enhancing self-reliance in the defence sector.
Background of Defence Production in India:
Early Recognition of Need (1950s-1970s):
- India's focus on indigenisation intensified post the Indo-China war of 1962 and subsequent conflicts.
Integrated Guided Missile Development Programme (IGMDP), 1983:
- Led by Dr. APJ Abdul Kalam, aimed at developing strategic missile systems; concluded successfully in 2008.
Self-Reliance Index and Abdul Kalam's Initiative (1992):
- Initiated with a Self-Reliance Index of 0.3, aimed to reach 0.7 by 2005 through strategic planning.
Responsibility Transfer (2000s):
- Shifted from Department of Defence Production (DDP) to Ordnance Factories Board (OFB) and Services; devised 15-year Perspective Plans for Indigenisation.
Need for Defence Production:
- India's defence production efforts are driven by several critical imperatives:
India’s Share in Global Arms Market:
- Accounts for only 0.2% of global arms exports; aims to enhance global footprint.
India as the Largest Importer of Arms:
- Despite efforts, remains the largest importer globally, with 11% of global arms imports during 2018-22.
Development of Military Industrial Complex:
- Focus on increasing national military spending; crucial for self-reliance and reducing foreign dependency.
Technology Transfer and Independence:
- Facilitates critical defence capabilities through technology collaborations and exports.
Exports:
- Initiatives like Brahmos Cruise Missiles to the Philippines exemplify expanding export capabilities.
Research and Development:
- Promotes significant R&D investments, fostering a robust defence industrial ecosystem.
Government’s Initiative towards Defence Indigenisation
- Recent policy measures highlight the government's commitment to indigenous defence manufacturing:
- Defence Procurement Policy, 2016:
- Introduced categories like "Buy (Indian-IDDM)" to streamline acquisitions.
Innovations for Defence Excellence (iDEX), 2018:
- Engages industries, MSMEs, and startups in defence innovation and R&D.
SPRINT Challenges:
- Introduced by NIIO and DIO to integrate new technologies into the Indian Navy.
Indigenous Manufacturing:
- Simplification of industrial licensing, liberalising FDI policies, and increasing domestic procurement share.
Defence Industrial Corridors:
- Established in Uttar Pradesh and Tamil Nadu to boost regional defence hubs.
Positive Indigenisation Lists:
- Prioritises domestic procurement under the Buy Indian (IDDM) category.
E-Biz Portal:
- Digitisation of industrial license processes for efficiency.
Custom Duty and FDI Policy:
- Uniform customs duties and enhanced FDI limits aim to level the playing field.
Vendor Development Guidelines:
- Guidelines to bolster private sector participation in defence manufacturing.
Defence Acquisition Procedure 2020:
- Streamlines defence procurement, supports Make in India initiatives.
Recent Rise in Exports of Indian Defence Products
Current Status of Exports and Trend:
- Exports surged to ₹16,000 crore in FY 2022-23, a significant rise supported by policy reforms.
Export Deals with Countries:
- Exporting to over 85 countries, including strategic deals with the Philippines for BrahMos missiles.
Reasons for Recent Increase in Exports:
- Private sector involvement, policy reforms, and simplified export procedures contributed to export growth.
Challenges Faced by Defence Production and Exports:
Lesser Defence Budget and Modernisation:
- Budget concerns impacting modernisation efforts and preparedness.
Insufficient Infrastructure and Capacity:
- Despite progress, inadequate infrastructure remains a challenge.
Limited Private Sector Participation:
- Dominance of DPSUs in defence production; efforts ongoing to increase private sector involvement.
Inadequate Investments in R&D:
- Long-term success hinges on sustained R&D investments.
Establishment of Economies of Scale:
- Crucial for enhancing productivity and reducing costs in defence production.
Measures to be Taken in Future:
Strategies to achieve India's defence production and export goals include:
Export High-Value Weapon Systems:
- Focus on exporting advanced platforms like LCA-Tejas and BrahMos missiles.
Comprehensive Export Deals:
- Offer integrated solutions including training and maintenance services.
Leverage Defence Lines of Credit (LoC):
- Extend LoCs to Friendly Foreign Countries to facilitate defence exports.
Enhance Private Sector Contribution:
- Incentivise and allocate significant projects to private companies.
Establish a Dedicated Export Promotion Body:
- Coordinate efforts to promote defence exports effectively.
Defence Modernisation Fund:
- Propose a non-lapsable fund to bridge budget shortfalls in modernisation efforts.
Prelims Takeaway
- Defence sector – new technologies in news