The efforts of government for indigenization of defence technologies in India has delivered suboptimal results. Examine reasons behind it and suggest measures to accelerate the pace of indigenization in the defence sector.

The defence sector is essential for upholding national security. Indigenisation of the defence sector helps reduce reliance on foreign powers, and lobster military capabilities whenever needed.
For long, defence indigenisation suffered due to:

  • Lack of level playing field for defence Public sector undertakings and private sector.
  • Inadequate participation of Indian MSMEs.
  • Stringent Foreign Direct Investment norms that have been relaxed only lately.
  • Freedom to import defence equipment, disincentivized domestic companies from innovating to produce same equipment.
  • Lack of ease of doing business – defence procurement was delayed and prospective suppliers became discouraged.

The steps that can improve indigenisation:

  • Level playing field – No preference to defence PSUs in procurement.
  • Corporatization of ordinance factories to increase professionalism, innovation and investment in Research and Development.
  • Adding more defence items to negative import list, creating opportunities for domestic producers.
  • Streamlining defence procurement procedures to reduce delays.
  • Minimum indigenous content in different categories of defence equipment should be hiked to at least 50%.
  • 60% indigenous content can be stipulated for some categories.
  • Encouraging joint ventures leading to technology transfer from foreign to Indian defence producers.
  • Joint development of Brahmos missile with Russia will aid indigenisation. Similar initiatives are required with Israel, France and USA.

India faces security threats from its neighbours. An indigenous defence sector will bolster capabilities to counter threats therefore requisite reforms should be implemented on War footing.

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