The Indian Ministry of Defence recently formulated a draft Defence Production and Export Promotion Policy 2020 (DPEPP 2020). The document serves as a comprehensive guide to bolster India’s defence production capabilities, promoting domestic development, and paving the way for a robust export market. The policy is grounded in achieving self-reliance and integrating India into global defence value chains.
Goals and Objectives
One of the policy’s primary objectives is to attain a turnover of Rs. 1,75,000 crore, including exports worth Rs. 35,000 crore in Aerospace and Defence goods and services by 2025. To create a dynamic, competitive Defence industry that caters to the needs of our Armed forces with quality products.
An integral part of this policy is to reinforce Make in India initiatives, reducing dependence on imports through domestic design and development. The strategy also endeavors to promote the export of defence products.
Creating an environment conducive to research and development is key to fostering innovation, creating Indian Intellectual Property ownership, and establishing a resilient, self-sufficient defence industry.
Strategies: Establishing Platforms for Procurement Reforms
A Project Management Unit (PMU) will be established to facilitate the development and production of technologies, manage life cycle costs, and maintain necessary platforms, equipment, and weapon systems. The PMU aims to transition from licensed production to indigenous design, development, and production.
A Technology Assessment Cell (TAC) will evaluate the industrial capability for design, development, and production with major industries in the country.
Indigenisation and Support to MSMEs/Startups
The indigenisation policy focuses on creating an industry ecosystem to make domestically the imported components (including alloys and special materials) and sub-assemblies for defence equipment. By 2025, it is proposed to indigenise 5,000 such items.
Optimising Resource Allocation
The current share of domestic procurement in overall Defence procurement is about 60%. In order to increase this, it’s necessary to double the procurement from domestic industry from Rs. 70,000 crore to Rs. 1,40,000 crore by 2025.
Investment Promotion and Ease of Doing Business
India is a large aerospace market with growing passenger traffic and increasing military expenditure. This has led to a rise in demand for aircraft, driving opportunities in the aerospace industry, including aircraft build work and Maintenance, Repair and Overhaul (MRO), helicopters, engine manufacturing and MRO work, line replaceable units, Unmanned Aerial Vehicles (UAVs) and upgrades and retrofits.
Innovation and R&D
Innovations for Defence Excellence (iDEX) has been introduced to provide necessary incubation and infrastructure support to startups in the defence sector. iDEX would be scaled up to engage with 300 more startups and develop 60 new technologies/products over the next five years.
Mission Raksha Gyan Shakti was launched to foster a culture of innovation and technology development and inspire a higher number of patents in Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB). The initiative promotes the creation of Intellectual Property in the sector and its commercial utilisation.
The Way Forward
Self-reliance in defence manufacturing plays a crucial role in maintaining national sovereignty, achieving military superiority and ensuring strategic independence. The policy is geared towards providing cost-effective defence equipment and reducing reliance on imports, which can help finance physical and social infrastructure.
