BENGALURU:Firmly pitching for initiatives to end India’s dependence on defence imports, Prime Minister Narendra Modi on Wednesday assured a conducive environment for manufacturers, including a discrimination-free tax system, and asked foreign firms not to be just “sellers” but be “strategic partners”.
There is a need to develop the defence industry as it is not enough to just buy equipment and assemble in the country, Modi said, speaking after inaugurating the 10th edition of Aero India 2015 at Air Force Station Yelahanka here. He added, “We have been doing this in the past without absorbing any technology or developing our own capabilities. In some areas, we are where we were three decades ago.”
There is a need to exploit the huge assets and vast potential of public sector companies and they need to do much better than they are doing now and need to be accountable, said the Prime Minister.
Nearly 60 per cent of defence equipment is currently imported and India is spending tens of billions of dollars on acquisition from abroad.
“There are studies that show that even a 20 to 25 per cent reduction in imports could directly create an additional 1 to 2 lakh highly skilled jobs in the country,’’ he said.
If domestic procurement is increased from 40 per cent to 70 per cent in the next five years, it would double the output. “That is why we are focusing on developing India’s defence industry and it is at the heart of our Make in India programme,’’ he added.
The government is planning to reform defence procurement policies and procedures that would give clear preference for equipment manufactured in India and ensure accountability and speedy decision making. “Acquisition and approval processes need to be reformed. We must indicate a clear road map of our future needs. This must take into account new technological trends and nature of future challenges,” Modi said.
Foreign firms must turn into strategic partners and can use India as part of their global supply chain, he said. The offsets policy should not become a means to export low-end products, but to acquire state-of-the-art technology and skills in core areas of priority, he added.
Modi said defence budgets across the world are becoming tighter and India’s frugal but sophisticated manufacturing and engineering services sectors can help reduce costs.
The defence industry in the government sector employs nearly 2 lakh workers, thousands of engineers and scientists. It supports a large pool of small and medium industries and generates nearly $7 billion annually, he said. The PM said the government’s support for research and development and assurance on purchase is essential for the sector.