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DEFENCE PRODUCTION IN INDIA

6th July, 2024 Security

DEFENCE PRODUCTION IN INDIA

Source: THE HINDU

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Context:

  • The country recorded its highest-ever growth in Indigenous defense production in value terms during the Financial Year (FY) 2023-24.
  • The Ministry reported that India's defense production reached a record ₹1,26,887 crore in FY 2023-24, marking a 16.7% increase from ₹1,08,684 crore in the previous year. This growth includes contributions from DPSUs, other PSUs manufacturing defense items, and private companies.

Details:

  • India achieved its highest-ever Indigenous defense production in FY 2023-24, reaching ₹1.27 lakh crore, a 16.7% increase from the previous year. The growth in defence production was contributed by both DPSUs/PSUs (79.2%) and the private sector (20.8%).
  • This milestone is attributed to government policy reforms and initiatives aimed at self-reliance, including the 'Make in India' program.
  • Defence exports also reached a new high of ₹21,083 crore in FY 2023-24, reflecting a 32.5% growth over the previous fiscal.
  • Overall, defence production has grown by over 60% in the past five years, showcasing steady and continuous growth

Introduction:

India’s defence production sector has witnessed significant growth and transformation in recent years. As the world’s largest arms importer, India has been making concerted efforts to boost Indigenous defence manufacturing, aiming to reduce dependency on foreign suppliers and strengthen its strategic autonomy.

Current Scenario:

  • Make in India Initiative: The government’s push for self-reliance through the ’Make in India’ program has given impetus to domestic defence production.
  • Defence Procurement Policy: Revisions in the policy have prioritized indigenous procurement and encouraged private sector participation.
  • Foreign Direct Investment (FDI): Increased FDI limit in the defence sector to 74.

Challenges:

  • Technological Gap: India still lags in certain critical technologies, necessitating continued reliance on imports for advanced systems.
  • Research and Development: Insufficient investment in R&D hinders innovation and development of cutting-edge defence technologies.
  • Skill Development: Shortage of skilled workforce in specialized areas of defence manufacturing.
  • Long Gestation Periods: Defence projects often face delays due to complex procurement procedures and lengthy trial processes.

Opportunities:

  • Export Potential: India’s growing defence industry presents opportunities to become a net exporter of defence equipment.
  • Public-Private Partnerships: Collaboration between defence PSUs and the private sector can lead to technology transfer and capacity building.
  • Start-up Ecosystem: Encouraging defence start-ups can bring innovation and agility to the sector.
  • Offset Policies: Leveraging offset obligations of foreign OEMs to boost domestic manufacturing capabilities.

Way Forward:

  • Increase R&D Spending: Allocate more resources for defence research to bridge the technology gap.
  • Streamline Procurement: Simplify and expedite defence procurement processes to reduce project timelines.
  • Skill Development: Invest in specialized training programs to create a skilled workforce for the defence sector.
  • Promote Exports: Develop a comprehensive strategy to promote Indian defence products in the global market.
  • Encourage Innovation: Create an ecosystem that fosters innovation in defence technology, including support for start-ups and SMEs.

Conclusion:

India’s journey towards self-reliance in defence production is crucial for its strategic autonomy and economic growth. While challenges persist, the opportunities are immense. With a continued focus on policy reforms, technological advancements, and collaborative efforts between public and private sectors, India can emerge as a global hub for defence manufacturing.

Source:

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PRACTICE QUESTION

Discuss the recent trends in India's defence production sector and analyze the impact of government policies and initiatives on Indigenous defence manufacturing. Highlight the key challenges and opportunities in achieving self-reliance in defence production.

READ ABOUT DEFENCE PRODUCTION- https://www.iasgyan.in/daily-current-affairs/defence-production#:~:text=The%20value%20currently%20stands%20Rs,figure%20was%20Rs%2095%2C000%20crore.

READ ABOUT DEFENCE ACQUISITION PROJECTS- https://www.iasgyan.in/daily-current-affairs/defence-acquisition-projects

DEFENCE EXPORTS- https://www.iasgyan.in/daily-current-affairs/defence-exports