Aatmanirbhar defence sector to act as a catalyst for foreign players to invest in India; Here's how-
22 Feb 2021 12:52:53
New Delhi, February 22: "India has set a target to achieve a turnover of Rs 1,75,000 crores including export of Rs. 35,000 crores in Aerospace and Defence goods and services by the year 2024", said Defence Minister Rajnath Singh sharing his thoughts on the budgetary provisions of 2021-22 and its impact on Defence sector.
The sentiment and approach of Atmanirbhatra has defined our approach towards the defence sector. "India plans to spend 130 billion Dollar on military modernization in the next 5 years. Recently, orders for 83 indigenously designed and developed LCA MK1A worth Rs. 48000 Crore have been awarded to HAL. The contract for indigenously designed Light Combat Helicopter is likely to be signed soon", he added. Key points from his address-
1. Union Budget for the year 2021-2022 , stands out as a unique initiative of our government. It brings a healthy mix of promise, potential and progress.Its forward-lookingagenda provides support for the defence and security of the country. It will enhancehousehold income, support infrastructure development, our farmers, industry, educationand very importantly the health sector amongst others.
2. The only way to cater for technological advancements in an attempt to remain ahead of the curve and yet remain frugalis by Making in India and Thinking Global or you could say the mantra – “Make in India, Make for the World”.
3. The defence industry represents a niche domestic market. Eventually, the industry can only thrive by going global. This is the reason whyour Government is actively promoting and facilitating not only domestic manufacture, but also an export-oriented defence industry.
4. India plans to spend 130 billion Dollar on military modernization in the next 5 years. Recently, orders for 83 indigenously designed and developed LCA MK1A worth Rs. 48000 Crore have been awarded to HAL. The contract for indigenously designed Light Combat Helicopter is likely to be signed soon.
5. Defence Ministry has planned to invest about 63% of the outlay for 2021-22 on domestic procurement i.e. about Rs.70221 crore for domestic defence procurement during for 2021-22. This increase will have a positive impact on enhanced domestic procurement, having multiplier effect on our industries including MSMEs and Start-ups. It would also increase the employment in defence sector.
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6. In order to promote indigenous design and development of defence equipment , ‘Buy (Indian-IDDM) has been accorded topmost priority , for procurement of capital equipment in DAP 2020. During current financial year, Rs. 75000 Crore worth AoNs have been accorded out of which 87% relate to Make in India.
7. Ministry is also working on bringing down the delays in timelines of capital acquisition. We will make efforts to complete the defence acquisition within 2 years, instead of the existing 3-4 years being taken on the average.
8. To give a major boost to innovative defence technology and support Start-ups base in the country, Ministry of Defence has planned to channelize about Rs. 1000 Crore during 2021-22 for procurement from iDEXStart-ups.
9. To widen the investment base, the Government of India has enhanced FDI in Defence Sector up to 74% under Automatic Route and 100% under Government route. This would further act as a catalyst for foreign players to invest in India.
10. The opening up of the defence sector for private sector participation is helping foreign OEMs enter into strategic partnerships with Indian companies and leverage opportunities in the domestic market as well as global markets. Due to these reforms, the FDI in India in Defence sector has jumped by more than 200%. Rs. 2,871 Crore worth FDI has been invested in defence sector in last 6 years.
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