Defence manufacturing will boost Make in India and enhance exports growth: PHD Chamber

No.PR-69

October 3, 2019

New Delhi

Defence manufacturing will boost Make in India and enhance exports growth: PHD Chamber

The policy initiatives undertaken by the Government in the recent years have brought about a paradigm shift in the defence sector with a renewed focus on self-reliance, import substitution, technology upgradation and indigenization, said the Study on Emerging Contours of India’s Defence and Homeland Security conducted by PHD Research Bureau, PHD Chamber of Commerce and Industry released during the Inaugural Session of 22nd India International Security Expo 2019 at Pragati Maidan here today.

India has made remarkable progress in the defence and homeland security and is on the path of strengthening its military expenditure for building strong defense and security environment, said the study.

The value of India’s defence production has increased in the recent years from about Rs. 74,121 crore in 2016-17 to about Rs.78,870 crore in 2017-18 and more than Rs. 80,500 crore in 2018-19.

Reforms to improve ease of doing business, opening up the defence sector for foreign investments by increasing the automatic cap from 26% to 49%, liberalizing licensing and procurement processes, among others, has opened new avenues for the expansion of production possibilities of defence manufacturing in India,said Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry while releasing the Study.

The dynamic policy environment by the Government has led to increase of India’s overall defence exports from around Rs 1,522 crore in 2016-17 to around Rs 4,682 crore in 2017-18 and around Rs 10,746 crore in 2018-19, said Dr D K Aggarwal.

Keeping in view the objective to increase the share of overall manufacturing in India’s GDP from 16% to 25% by 2022, it becomes crucial that the defence sector should be tapped and explored as one of the major sectors contributing to the growth of manufacturing in the country, he said.

MSMEs have contributed significantly to India’s defence manufacturing by way of supplying several defence components over the years. The Government has introduced several measures to provide adequate support to MSMEs to increase their participation in defence manufacturing, said the Study.

Going forward, role of MSMEs will be crucial in contributing to the employment generation and achieving self-reliance in defence sector, said the Study.

It is encouraging to note that the Government has created an ecosystem where private and public sectors are contributing together as per their respective strength and experience in the growth of defence sector, said Dr D K Aggarwal.

According to the Study, some of the measures that can enhance the contribution of the defence sector to bolster the ‘Make in India’ initiative include

• Encouraging global investors to set up manufacturing base in India;

• Developing critical and cutting-edge technologies indigenously;

• Fostering innovations and technology development;

• Strengthening university-industry linkages in defence;

• Collaborations with colleges and Industrial Training Institutes (ITIs) to ensure that defence relevant technologies and skills are part of the curriculum;

• Extending line of credit facility and other financing options;

• Early rollout of the draft defence production policy 2018;

• Enhancing priority-sector funding and encouraging long-term funding mechanisms; among others.

Going ahead, ease of doing business for the defence and homeland security manufacturing will go a long way not only to minimize the imports but also to make India a defence manufacturing hub and increase its presence significantly in the global defence products exports, said Dr D K Aggarwal.

The esteemed dignitaries at the Inaugural Session were Shri L C Goyal, CMD, India Trade Promotion Organisation (ITPO), Shri Vivek Bhardwaj, IAS, Additional Secretary, Policy Modernization, Ministry of Home Affairs, Government of India, Shri Rajesh Agrawal, IAS, Executive Director, India Trade Promotion Organisation (ITPO), H.E. Dr Ron Malka, Israel Ambassador to India, Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry, Dr Mahesh Y Reddy, Secretary General, PHD Chamber of Commerce and Industry, Shri Rajiv Bhatnagar, Chairman, PHD Defence and HLS Committee, Lt Gen Subrata Saha PVSM UYSM YSM VSM (Retd), Member-NSAB and Chief Mentor, PHD Defence and HLS Committee and Dr S P Sharma, Chief Economist, PHD Chamber.

The link of the report is appended- https://drive.google.com/file/d/1NV0NLC1GObUC0JGxNH47pNBJTlx7hmB6/view?usp=sharing

Ends.

Media Division

PHDCCI