Make in India and the revolution in India's defence manufacturing sector
| 2024-04-08
Image courtesy - Official X handle of the Eastern Command, Indian Army.
Multiple policy reforms in recent years have strengthened India’s defence manufacturing sector
The 'Make in India' initiative has significantly propelled India's defence sector, making it a prominent player in defence manufacturing and exports. The government's commitment to self-reliance and indigenization in defence production is evident through its allocation of a substantial portion of the defence budget to domestic procurement.
For the Financial Year 2023-24, 75% of the modernization budget, amounting to Rs 99,223.03 crore, was dedicated to procurement from domestic sources, highlighting the shift towards self-reliance.
The Indian government has initiated several policy reforms to bolster the defense sector. These include the Innovation for Defence Excellence (iDEX) and Technical Development Fund (TDF), which encourage the participation of MSMEs and startups in defence production, leading to increased indigenization of defence items.
The government's focus on these areas has facilitated the growth of the domestic defence industry, contributing to an increase in defense exports .
India's defence industry has seen substantial growth, with the value of defence production surpassing Rs 1 lakh crore for the first time in FY23. This growth is underpinned by key reforms aimed at spurring development in the sector, with a significant increase in defense exports to over 75 countries.
The government has also liberalized foreign direct investment (FDI) in the defence sector, raising the cap to 74% under the automatic route to attract foreign investments and bolster manufacturing.
Strategic initiatives like the Defence Acquisition Procedure (DAP) 2020 and the establishment of two dedicated Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu are part of the broader strategy to develop a robust domestic defense manufacturing ecosystem. These corridors are expected to act as clusters of defence manufacturing, leveraging existing infrastructure and human capital to boost the sector's growth.
The 'Make in India' initiative is driving India toward becoming a global hub for defence manufacturing and exports, marked by significant policy reforms, strategic partnerships, and investment in indigenization and self-reliance. The initiative has led to a marked increase in domestic production, reduced dependence on foreign procurement, and positioned India as a significant player in the global defence market.
For the Financial Year 2023-24, 75% of the modernization budget, amounting to Rs 99,223.03 crore, was dedicated to procurement from domestic sources, highlighting the shift towards self-reliance.
The Indian government has initiated several policy reforms to bolster the defense sector. These include the Innovation for Defence Excellence (iDEX) and Technical Development Fund (TDF), which encourage the participation of MSMEs and startups in defence production, leading to increased indigenization of defence items.
The government's focus on these areas has facilitated the growth of the domestic defence industry, contributing to an increase in defense exports .
India's defence industry has seen substantial growth, with the value of defence production surpassing Rs 1 lakh crore for the first time in FY23. This growth is underpinned by key reforms aimed at spurring development in the sector, with a significant increase in defense exports to over 75 countries.
The government has also liberalized foreign direct investment (FDI) in the defence sector, raising the cap to 74% under the automatic route to attract foreign investments and bolster manufacturing.
Strategic initiatives like the Defence Acquisition Procedure (DAP) 2020 and the establishment of two dedicated Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu are part of the broader strategy to develop a robust domestic defense manufacturing ecosystem. These corridors are expected to act as clusters of defence manufacturing, leveraging existing infrastructure and human capital to boost the sector's growth.
The 'Make in India' initiative is driving India toward becoming a global hub for defence manufacturing and exports, marked by significant policy reforms, strategic partnerships, and investment in indigenization and self-reliance. The initiative has led to a marked increase in domestic production, reduced dependence on foreign procurement, and positioned India as a significant player in the global defence market.
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