Day 85 – Q.2 What are the key strengths and weaknesses of India’s defence manufacturing industry, and what measures can be taken to leverage its potential as a global player in this sector? Discuss.

What are the key strengths and weaknesses of India’s defence manufacturing industry, and what measures can be taken to leverage its potential as a global player in this sector? Discuss.

भारत के रक्षा निर्माण उद्योग की प्रमुख ताकत और कमजोरियां क्या हैं, और इस क्षेत्र में एक वैश्विक खिलाड़ी के रूप में इसकी क्षमता का लाभ उठाने के लिए क्या उपाय किए जा सकते हैं? चर्चा करें।

Approach

Candidates can start the answer with basic idea of indigenisation of defence sector and discuss strength and weakness of emerging Indian defence sector.

Introduction

The Defence Sector in India is identified as an important area with an ocean of opportunities for self-reliance. With large-scale modernisation requirements of the Indian Armed Forces, India’s vision for Atma Nirbhar Bharat has provided further impetus to realise the goal of indigenisation of Defence Sector.

Body

• India’s defense manufacturing industry has made significant strides in recent years, with the country now ranking as the world’s third-largest defense importer.

However, the industry still faces some significant challenges that need to be addressed.

Strengths:

• Large domestic market: India has a large domestic market for defense equipment, which provides a stable source of demand for defense manufacturers.
• Skilled workforce: India has a large pool of skilled engineers and technicians, which can be leveraged to develop high-quality defense products.
• Growing private sector participation: India’s defense industry has seen growing participation from the private sector, which has helped to bring in new ideas and innovation.
• Strong research and development capabilities: India has several public and private research and development institutions, which can help to develop cutting-edge defense technologies.
• Favorable policy environment: India’s government has taken several steps to promote the growth of the defense manufacturing industry, including the introduction of the Defense Production Policy and the Make in India initiative.

Weaknesses:

• Over-reliance on imports: Despite efforts to promote domestic manufacturing, India still relies heavily on imports for its defense needs, which hampers the growth of the domestic defense industry.
• For instance, amid the Russia-Ukraine war, India is awaiting the delivery of the S-400 Air Defence Systems under a deal signed in 2018.
• In addition, several new deals are in line including 12 Sukhoi-30MKI aircraft and 21 MiG-29 fighter jets for the Indian Air Force.
• Narrow Private Participation: Private sector participation in the defence sector is constrained by the lack of a conducive financial framework, that means our defence production is unable to benefit from modern design, innovation, and product development.
• Lack of Critical Technology: Lack of design capability, inadequate R&D investment, inability to manufacture major subsystems and components hamper indigenous manufacturing.
• Also, the relationship between R&D institutions, production agencies (public or private) and end-users is extremely fragile.
• Limited innovation: India’s defense industry has traditionally focused on manufacturing and assembly rather than innovation, which has limited the development of cutting-edge technologies.
• Inadequate infrastructure: India’s defense industry faces significant infrastructure challenges, such as a lack of modern testing and certification facilities.
• Bureaucratic hurdles: India’s defense procurement process can be slow and bureaucratic, which can deter foreign and domestic investors.
• Limited collaboration between public and private sectors: India’s public and private defense sectors have limited collaboration, which can lead to duplication of efforts and inefficiencies.
• Lack of Nexus Between Stakeholders: India’s defence manufacturing capability is hindered by overlapping jurisdictions between the Ministry of Defence and the Ministry of Industrial Promotion.

Conclusion

Indigenized India’s defense sector would further strengthen the economy by generating employment opportunities and saving the exchequer by reducing the import burden. Also, Self-sufficiency in defense will fundamentally lead to India’s strategic independence.