India's defence ecosystem is at an inflection point, driven by public sector tailwinds, but sluggish private investment is holding it back, defence secretary Rajesh Kumar Singh said on May 29 at a CII industry event in New Delhi.
The defence sector is getting a lot of attention after the four-day military conflict with Pakistan earlier this month, with calls growing for modernisation and greater indigenisation backed by latest tech.
While India’s defence sector has grown 6–7 percent annually over the past decade, largely due to government-led initiatives, the next phase of growth must be fuelled by deeper private sector participation and investment in R&D, he said.
India is in a “good place” as far as competitive strategic deal-making goes and is increasingly becoming an innovation-led, tech-driven industrial economy, Singh said. He, however, acknowledged persistent challenges in defence manufacturing, including licensing bottlenecks, procedural delays, and red tape.
“We need to reduce all hurdles and promote ease of doing business in defence,” he said, adding that streamlining procurement processes is a priority. “We’ll bury you, the private sector, in orders but there is a need for greater investment in R&D from your side,” he said.
For the first time in years, the defence modernisation budget was fully utilised in the last fiscal, breaking a long-standing pattern of underspending caused by slow procurement decisions. The pace of modernisation is expected to pick up, Singh said.
Though defence expenditure has fallen to 1.9 percent of GDP, Singh said it remains sufficient to meet current modernisation goals. He reiterated that the government’s long-term defence vision is rooted in atmanirbharta (self-reliance), and that technology disruptions are already transforming both the nature of warfare and the weapons manufacturing landscape.
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