Prime Minister Narendra Modi announced on August 27 that 74 percent foreign direct investment (FDI) will now be allowed in the defence sector through the automatic route. The move may prove a major push for ‘Aatmanirbhar Bharat’ in defence manufacturing.
Addressing the ‘Aatmanirbhar Bharat Defence Industry Outreach Webinar’ on August 27, the PM emphasised the need to make India’s defence sector self-reliant. He said: “We aim to increase defence manufacturing in India and make the nation a reliable weapon supplier to friendly nations.”
For many years, India has been one of the biggest defence importers. But now, the focus will be shifted to manufacturing instead. The ultimate aim of the defence manufacturing push will be to consolidate India’s position as a net security provider in the region.
PM Modi said: “When India got independence, it has a robust defence production ecosystem. Unfortunately, defence production in India was not focussed on post-independence....But we will now work towards breaking all barriers to promote defence production in India”
He added: “Efforts are being made to boost defence production, develop new technology and give a big role to private players in the defence sector.”
Seconding the PM’s plan for making India’s defence sector increasingly self-reliant, Chief of Defence Staff General Bipin Rawat said: “We do have large demands for ammunition. We are asking for ten years' requirement for ammunition…. We want to promote defence exports. Once the government meets its requirement then the excess can be exported.”
He further said: “Product supply, which is in the pipeline will not be put on hold. A second negative list (restricting import) of advanced technology items will be put out next year, which could be bigger than the current one with 101 items. It will be out early next year.”
Rawat added that items will be added to the negative list based on the performance of private industries perform. He said: “If the aerospace industry finds its feet, then then we will add such items to the negative import list also.”
The CDS informed that AK 203 will be the mainstay of rifles for Indian Defence Forces, and these will be manufactured in India through a joint venture. As for the Naval Utility Helicopter, he said all industries will be given equal opportunity to participate in the contract.