Making a strong pitch to end India’s dependence on defence imports, Prime Minister Narendra Modi on Wednesday promised a conducive environment for manufacturers, including a discrimination-free tax system, and asked foreign firms not to be just “sellers” but “strategic partners”.
Inaugurating the 10th ‘Aero India’ show, the Prime Minister said while the country needs to increase its defence preparedness and modernise its forces due to security challenges that were well known, it should aim to manufacture 70 per cent of military hardware domestically in next five years and remove the tag of being number one importer of defence equipment.
Stressing that developing domestic defence industry “is at the heart of the ‘Make in India’ programme”, he said, “We will build an industry that will have room for everyone – public sector, private sector and foreign firms”.
“From sellers, foreign firms must turn into strategic partners. We need their technology, skills, systems integration and manufacturing strength,” he said.
Ruing that India spends “tens of billions of dollars on acquisitions from abroad”, PM Modi said government’s focus is to reduce imports and develop domestic defence industry with a sense of mission which “is at the heart of our Make in India programme”.
The Prime Minister expressed confidence that India will emerge as a major global centre for defence industry. Modi said a strong defence industry would not only make the country more secure but also make it more prosperous.
“We must ensure that our tax system does not discriminate against domestic manufacture in comparison to imports,” he said at Asia’s premier air show at the IAF Yelahanka air base on the city outskirts.
Noting that India imports up to 60 per cent in defence sector, he said there are studies that show that even a 20 to 25 per cent reduction in imports could directly create an additional 100,000 to 120,000 highly skilled jobs in India.
“If we could raise the percentage of domestic procurement from 40 per cent to 70 per cent in the next five years, we would double the output in our defence industry,” he said.
The Prime Minister said India’s defence industry will succeed more “if we can transform the manufacturing sector in the country”.
However, Modi noted that the nature of industry is such that imports will always be there. “In turn, they can use India as part of their global supply chain,” he said.
Speaking candidly, he said public sector needs to do much better than they are doing now.
“We have to exploit their huge assets and a vast potential. At the same time, we have to make them accountable. We want to develop an industry that is dynamic. It should constantly stay at the cutting edge of the global industry,” he said.
A strong defence industry can boost investment, expand manufacturing, support enterprise, raise the technology level and increase economic growth in the country, the Prime Minister said.
Modi said his government had made export policies clearer, simpler and predictable.
Modi also spoke about involving country’s scientists soldiers, academia, industry and independent experts more closely in research and development.
Government’s support for research and development is essential for defence sector and, it should also be accompanied by a degree of assurance on purchase, he said.
“We are introducing a scheme to provide up to 80 per cent of funding from the government for development of a prototype in India. And, we are also launching a Technology Development Fund”.
“For too long, our research and development has been confined to government laboratories…,” he said.