FICCI/PIB, Aug 28

The Prime Minister Narendra Modi addressed the seminar on Atmanirbhar Bharat in Defence Manufacturing via Video Conferencing today. Stressing on the need to become Atmanirbhar in Defence Manufacturing, the Prime Minister said our aim is to boost defence production, develop new technology and give significant roles to private players in the defence sector. 

Complimenting Defence Minister Rajnath Singh and his entire team for working on a mission mode and taking relentless efforts, the Prime Minister said that the objective of achieving self-reliance in defense production will definitely gain momentum from today’s seminar. 

The Prime Minister said when India became independent, it had a great potential and ecosystem for defense production in India but for decades no serious efforts were made. The Prime Minister remarked that the situation is now changing, continuous and persistent efforts are being undertaken to bring about reforms in the defence sector.  He enumerated several concrete steps undertaken in this direction such as  improvement in licensing  process, creating level playing field, simplification of export process.  

PM remarked that a sense of confidence in the defense sector is essential for building a modern and self-reliant India. Decisions such as appointment of CDS, which were pending for decades have been taken now, which reflects confidence of New India. Appointment of Chief of Defence Staff has resulted in better synergy and coordination among the three forces, and has helped in the scaling up of defence procurement. Similarly, he highlighted that opening of defence sector by permitting 74 percent FDI via automatic route reflects the confidence of new India.  

The PM said steps such as earmarking a part of the capital budget for domestic  procurement, 101 items for domestic procurement will encourage and give a fillip to domestic defence industries. He also said that the Government is working on speeding up the procurement process, streamlining the system of testing etc. Speaking about Corporatization of Ordnance factories, PM said once completed it will strengthen both the workers and the Defence sector. 

Emphasizing on the need for technology up-gradation for self-sufficiency in modern equipment, the Prime Minister said that in addition to DRDO, Government is encouraging Research and Innovation in the private sector and in academic institutions as well. The Prime Minister mentioned that emphasis is on co-production through joint ventures with foreign partners.  

Highlighting that the Government has been working on the mantra of Reform, Perform, and Transform, the Prime Minister said major reforms are underway in areas of Intellectual Property, Taxation, Insolvency and Bankruptcy, Space and Atomic Energy.  

On the infrastructure initiatives, the Prime Minister spoke about two defence corridors underway in Uttar Pradesh and Tamil Nadu.  He said the state of the art infrastructure is being built in collaboration with the state government of Uttar Pradesh and Tamil Nadu. An investment target of 20 thousand crores in the coming 5 years has been set for this. 

PM observed that the iDEX initiative which was launched to encourage entrepreneurs particularly those associated with MSME and Start-ups, is also getting positive results. Through this platform, more than 50 start-ups have developed technology and products for military use, he noted. 

The Prime Minister said that the goal is to build a capable India to make the Global Economy more resilient, more stable and to bring peace in the world. This is the idea behind Atmanirbharta in Defence Manufacturing. India has the potential to become a reliable supplier of defence equipment to many of its friendly nations. It will strengthen India's strategic partnerships and strengthen India’s role as a  "net security provider" in the Indian Ocean region, the Prime Minister said.  

He said feedback and suggestions received on the  Defence Production and Export Promotion Policy Draft  will help in implementing this policy at the earliest. 

PM concluded by saying that collective efforts will help in releasing our resolve to become self- reliant, to become an Atmanirbhar Bharat. 

Raksha Mantri Shri Rajnath Singh listed out the salient features of the recently announced first Defence Production and Export Promotion policy at the Atmanirbhar Bharat Defence Industry Outreach Webinar which was jointly organised by Society of Indian Defence Manufacturers (SIDM), Federation of Indian Chambers of Commerce and Industry (FICCI) and Department of Defence Production (DDP), Ministry of Defence (MoD) here today.

It may be recalled that Prime Minister Shri Narendra Modi had highlighted the need for achieving self-sufficiency in defence production in his clarion call on ‘Atmanirbhar Bharat Abhiyan’ during his announcement of COVID-19 related economic package of Rs 20 lakh crore on May 12, 2020. He further outlined his vision for the same on Jun 02, 2020; wherein five pillars of Atmanirbhar Bharat were identified as economy, infrastructure, systems, vibrant demography and demand.

Defence sector has already been identified as one of the core areas to boost ‘Make in India’ where immediate transformation is required. Prime Minister Shri Narendra Modi also spelt out his vision of achieving five billion USD (Rs 35,000 crore) defence related exports target to become net exporter of defence equipment in the next five years.

Towards this end, a draft Production and Export Promotion policy has been formulated and it was placed in the public domain seeking suggestins from various stakeholders.

The draft of Production and Export Promotion policy aims at providing greater visibility of Armed Forces requirements to the defence manufacturing industry. The policy proposes establishment of an aero-engines complex with focus on Maintenance Repair Overhaul (MRO) as well as critical technologies. Under this policy export target has been set as 25 per cent of the revenue. By 2025, this policy aims at achieving Rs 1.75 lakh crore in annual turnover.

To promote Atmanirbhar Bharat in the defence manufacturing, a separate budget of Rs 52,000 crore has been set aside for procurement from domestic vendors.

Speaking on MoD recently issuing a negative list of 101 defence items on the valuable suggestion of Prime Minister, the minister said, “After a certain period of time these items will not be procured from outside. This list is the beginning of a process that has the potential to transform the defence industry. This list of 101 items includes not only minor parts but also warfare systems, integrated platforms, combat vehicles. This list is just a beginning, so that in the coming time, defence equipment worth Rs 1.40 lakh crore will be purchased domestically.”     

Raksha Mantri said that the government has made several bold policy reforms to promote self-reliance, in the defence sector. These include increasing the limit to 74 percent for Foreign Direct Investment through automatic route in the Defence sector and setting up of Defence corridors in UP and Tamil Nadu in addition to Strategic Partnership (SP) Model to promote investments, liberalisation of Industrial License regime, and 'Defence Investor Cell' to address the problems of investors.

He said, “Self-reliance is actually another form of our confidence and strength. According to the formula presented by our Prime Minister five 'I', i.e., Intent, Inclusion, Investment, Infrastructure and Innovation, we have taken steps towards increasing our own strength. Its results have also started coming in front of us.”

Speaking about the urge of Nations to become self-reliant, the Raksha Mantri said, “The spirit of ‘self-reliance’ has always been present in our society, our education and values. It has existed as part of us, from our tradition to modern times. It has existed from 'the Vedas' to 'Vivekananda Ji', from 'the Geeta' to 'Gandhi Ji', and from 'Upanishads' to 'Upadhyay' (Deendayal) ji. Everyone, whether they have been our great men or our governments, in their own way accepted the importance of self-reliance. But in the recent past, the emphasis placed on the call of our Prime Minister Shri Narendra Modi on atmanirbharta is unprecedented.”

While answering questions from the participants, Raksha Mantri said that corporatisation of Ordnance Factory Board (OFB) would be completed within a year. In response to another question, Rajnath Singh replied that the two Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu were targeted to attract thousands of crore of investments in the next five years. 

Industry representatives also sought clarifications on various reforms introduced in defence acquisition procedure including offset provisions, reservation of items for procurement from MSMEs, definition of Indian vendor etc.

Gen Bipin Rawat, Chief of Defence Staff said that after consultation with the industry, there are a lot of items that they want to be added in the negative list. “The list is going to increase, and we will have the next list by early next year. That will not be the end of the list. Gradually, as we see the private industry delivering, we will keep on adding more items to the list.”

He further expressed hope that the Indian aerospace industry will find their feet in India and that this is one area where we are lagging. “Putting them in the negative list will be one of our greatest achievements,” he added.

Raj Kumar, Secretary, Department of Defence Production, Ministry of Defence said that the proof of Atmanirbharta lies in our ability to export our defence products. “With the help of the defence attaché, we have developed country profiles of friendly nations. We propose that with due facilitation by defence attaché and Indian embassies will help us promote export of our indigenous products,” he added.

Prof K Vijay Raghavan, Principal Scientific Advisor, Govt of India, said that the government has set up the Empowered Technology group, which will ensure that we develop high-end technology locally, within India. He further added that design, development and prototyping in detail through traditional manufacturing will be the key to promoting the sector.

Dr Sangita Reddy, President, FICCI said that the new draft Defence Acquisition Procedure 2020 is an important move towards self-reliance. “Indian defence sector is one of the important drivers of the engine of growth and can raise the contribution of manufacturing from 16 per cent of GDP to a target of 25 per cent,” she added.

S P Shukla, Chairman, FICCI Defence and Aerospace Committee and Chairman, Mahindra Defence said that the Indian defence sector will give its full support in achieving the target of both reaching the $ 5 trillion target and becoming Atmanirbhar Bharat and create new job opportunities.

Baba N Kalyani, Chairman and Managing Director, Bharat Forge Limited said that achieving Atmanirbharta in the defence sector is a continuous journey and not a destination. All stakeholders including the industry, policymakers, researchers and academia have to work together to achieve this.