India making big strides in push to grow defense industry
India’s domestic defense production reached an all-time high after the New Delhi government took bold steps to strengthen the sector.
A spectrum of government initiatives involved more private sector firms, boosted innovation in defense and aerospace, increased indigenous manufacturing of components and spare parts, and streamlined investment, production licenses, procurement and export procedures.
Indian Defence Minister Rajnath Singh, pictured, outlined to parliament his ministry’s vision on June 26, 2019, India’s Press Information Bureau reported.
“Ordnance factories and defense public sector undertakings have played a huge role in making our country a defense production hub,” Singh said. Four of India’s state-owned defense undertakings reaped their highest revenues ever in 2018-19, producing aircraft, ships, armored vehicles, advanced electronics and other defense products.
To modernize India’s defense factories, the government approved more than U.S. $1.5 billion in proposals in 2018-19, he added.
New Delhi also will establish two “defense industrial corridors,” he said, with factories and other facilities opening in Chennai, Coimbatore, Hosur, Salem and Tiruchirappalli in Tamil Nadu and spanning across Agra, Aligarh, Chitrakoot, Jhansi, Kanpur, and Lucknow in Uttar Pradesh.
New Delhi’s “Make in India” program to boost domestic production is being applied to the defense industry, the minister told lawmakers, with a new category of procurement introduced “to promote indigenous design and development of defense equipment.” Under this category, Indian firms are working with foreign original equipment manufacturers active in India “to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.”
The Innovations for Defence Excellence (iDEX) program, meanwhile, is an “innovation ecosystem” launched in April 2018.
The iDEX program is “aimed at creation of an ecosystem to foster innovation and technology development in defense and aerospace,” Singh reported, by engaging industries, startups, innovators, research institutes and academia to “provide them grants/funding and other support to carry out R&D, which has potential for future adoption for Indian defense and aerospace needs.”
Similarly, the government created the Technology Development Fund to encourage industry participation by distributing grant money for the production of cutting-edge defense technology.
Components and spare parts used in defense platforms will now be made in India under a policy launched in March 2019, Singh’s report continued. Such domestic production is eased by licensing reform under the Industries Development and Regulation Act, which has reduced barriers to entry for manufacturers.
To inform potential investors of regulatory requirements and to facilitate their investments in India’s defense sector, Singh’s ministry created the Defense Investor Cell. It will make exporting defense products easier with a streamlined clearance process that has been made transparent and placed online, he explained. Singh emphasized the importance of the partnership between India and the United States to India’s vision for its defense industry.
“A single point of contact between India and the U.S. has been identified on both sides to promote defense trade,” he said. “Defense exports are also a significant part of the bilateral discussions and negotiations. Lines of credit are also being utilized for promoting defense exports.”
