Defence production hit record high of nearly ₹1.27 lakh crore in 2023-24: Defence Ministry

Background of Defence Production in India:

Early Recognition of Need (1950s-1970s):

• India's focus on indigenisation intensified post the Indo-China war of 1962 and subsequent conflicts.

Integrated Guided Missile Development Programme (IGMDP), 1983:

• Led by Dr. APJ Abdul Kalam, aimed at developing strategic missile systems; concluded successfully in 2008.

Self-Reliance Index and Abdul Kalam's Initiative (1992):

• Initiated with a Self-Reliance Index of 0.3, aimed to reach 0.7 by 2005 through strategic planning.

Responsibility Transfer (2000s):

• Shifted from Department of Defence Production (DDP) to Ordnance Factories Board (OFB) and Services; devised 15-year Perspective Plans for Indigenisation.

Need for Defence Production:

• India's defence production efforts are driven by several critical imperatives:

India’s Share in Global Arms Market:

• Accounts for only 0.2% of global arms exports; aims to enhance global footprint.

India as the Largest Importer of Arms:

• Despite efforts, remains the largest importer globally, with 11% of global arms imports during 2018-22.

Development of Military Industrial Complex:

• Focus on increasing national military spending; crucial for self-reliance and reducing foreign dependency.

Technology Transfer and Independence:

• Facilitates critical defence capabilities through technology collaborations and exports.

Exports:

• Initiatives like Brahmos Cruise Missiles to the Philippines exemplify expanding export capabilities.

Research and Development:

• Promotes significant R&D investments, fostering a robust defence industrial ecosystem.

Government’s Initiative towards Defence Indigenisation

• Recent policy measures highlight the government's commitment to indigenous defence manufacturing:
• Defence Procurement Policy, 2016:
• Introduced categories like "Buy (Indian-IDDM)" to streamline acquisitions.

Innovations for Defence Excellence (iDEX), 2018:

• Engages industries, MSMEs, and startups in defence innovation and R&D.

SPRINT Challenges:

• Introduced by NIIO and DIO to integrate new technologies into the Indian Navy.

Indigenous Manufacturing:

• Simplification of industrial licensing, liberalising FDI policies, and increasing domestic procurement share.

Defence Industrial Corridors:

• Established in Uttar Pradesh and Tamil Nadu to boost regional defence hubs.

Positive Indigenisation Lists:

• Prioritises domestic procurement under the Buy Indian (IDDM) category.

E-Biz Portal:

• Digitisation of industrial license processes for efficiency.

Custom Duty and FDI Policy:

• Uniform customs duties and enhanced FDI limits aim to level the playing field.

Vendor Development Guidelines:

• Guidelines to bolster private sector participation in defence manufacturing.

Defence Acquisition Procedure 2020:

• Streamlines defence procurement, supports Make in India initiatives.

Recent Rise in Exports of Indian Defence Products

Current Status of Exports and Trend:

• Exports surged to ₹16,000 crore in FY 2022-23, a significant rise supported by policy reforms.

Export Deals with Countries:

• Exporting to over 85 countries, including strategic deals with the Philippines for BrahMos missiles.

Reasons for Recent Increase in Exports:

• Private sector involvement, policy reforms, and simplified export procedures contributed to export growth.

Challenges Faced by Defence Production and Exports:

Lesser Defence Budget and Modernisation:

• Budget concerns impacting modernisation efforts and preparedness.

Insufficient Infrastructure and Capacity:

• Despite progress, inadequate infrastructure remains a challenge.

Limited Private Sector Participation:

• Dominance of DPSUs in defence production; efforts ongoing to increase private sector involvement.

Inadequate Investments in R&D:

• Long-term success hinges on sustained R&D investments.

Establishment of Economies of Scale:

• Crucial for enhancing productivity and reducing costs in defence production.

Measures to be Taken in Future:

Strategies to achieve India's defence production and export goals include:

Export High-Value Weapon Systems:

• Focus on exporting advanced platforms like LCA-Tejas and BrahMos missiles.

Comprehensive Export Deals:

• Offer integrated solutions including training and maintenance services.

Leverage Defence Lines of Credit (LoC):

• Extend LoCs to Friendly Foreign Countries to facilitate defence exports.

Enhance Private Sector Contribution:

• Incentivise and allocate significant projects to private companies.

Establish a Dedicated Export Promotion Body:

• Coordinate efforts to promote defence exports effectively.

Defence Modernisation Fund:

• Propose a non-lapsable fund to bridge budget shortfalls in modernisation efforts.

Prelims Takeaway

• Defence sector – new technologies in news