Defence Minister Rajnath Singh says with the growth of a robust domestic manufacturing base, India aims to save $2 billion in defence imports by 2022

Published : February 05, 2021 21:25 IST

Defence Minister Rajnath Singh at the Aero India 2021, in Bengaluru on February 2. Photo: MURALI KUMAR K.

Defence Minister Rajnath Singh said today that he expected India’s defence base to more than double within the next two years. Said Singh: “A robust domestic manufacturing base relates directly to the potential for defence exports. We plan to move from a $ 11 billion defence base to a $ 25 billion defence base by 2025. Of this, we further intent to create an export component of $ 5 billion.”

Rajnath Singh, who was speaking at the “Bandhan Ceremony for signing MoUs, Product Launches & Major Announcements” on the concluding day of Aero India 2021, said that the plethora of MoUs (128 in number), the 19 transfer of technology agreements and the 32 major announcements that were made public during the air show exemplified the high level of public-private partnership in the defence and aerospace manufacturing sector. Singh also disclosed that 45 Micro, Small and Medium Enterprises (MSMEs) had bagged orders worth Rs.203 crore during the three-day Aero India 2021 jamboree. Pointing out to the numerous combat drones that were displayed by the MSMEs during the air show, the Defence Minister said that this was a clear example of the MSMEs’ surge in participation and the ability to innovate in the defence sector.

The Defence Minister said that Prime Minister Narendra Modi’s clarion call for Atmanirbhar Bharat (self-reliant India) ignited the country’s spirit of cutting-edge innovation, exploration and collaborative efforts in the defence and aviation sectors. He said: “The robustness of any endeavour and vision rests on its foundation. And our vision and foundation rests on three pillars. These are research and development, public-private partnership in defence production, and defence exports. And over time, the results of our endeavour are becoming visible in each of these areas.”

Rajnath Singh also disclosed that until now it was only the Defence Research and Development Organisation (DRDO) that was involved in defence-related research. But there was a need to broaden this research base. He said: “DRDO patents have been shared with the private sector. Also, test facilities at the DRDO, OFB [Ordnance Factory Board], DPSUs [Defence Public Sector Undertakings], DGQA [Directorate General of Quality Assurance], Army, Navy and Indian Air Force have been made available to the private sector in order to offset the setting up costs of these facilities.”

Claiming that between 2016 and 2019, 138 proposals worth $ 37 billion from domestic defence manufacturers had been approved, the Defence Minister said that by encouraging the manufacturing of defence-related items in India, the government hoped to bring down defence imports by at least $ 2 billion by 2022.

Speaking about the exclusive defence corridors created in Uttar Pradesh and Tamil Nadu, he said that Rs.3,700 crore and Rs.3,100 crore had been pledged by private and public industries in these corridors. The government, he said, was also looking at a further investment of $3 billion in these two corridors to improve the investment climate and facilities. Said Singh: “We realise, appreciate and understand also that in a highly specialised and technology-driven industry like the defence sector, a collaborative, cooperative and collective approach in defence production is the way forward. We can only excel if the requisite ecosystem is built for its growth.”

The Defence Minister said that the government’s decision in August 2020 to increase the foreign direct investment (FDI) limit in the defence sector from 49 per cent to 74 per cent under the automatic route and 100 per cent through the government route would provide the right climate to increase FDI flows.

Stating that India was home to the fastest-growing defence aviation industry, he said that the government’s emphasis was on indigenous manufacturing of defence goods and platforms. He added that he expected the aero component sector to grow from Rs.30,000 crore to Rs.60,000 crore by 2024.