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Make in India pitch at Aero India, PM stresses need to modernise forces

Prime Minister Narendra Modi on Wednesday said the defence sector was at the heart of the Make in India programme and that it was important to modernise the country's armed forces.

india Updated: Feb 18, 2015 16:23 IST

Prime Minister Narendra Modi on Wednesday vowed to end India's status as the world's number one defence importer, saying he wanted 70% of hardware to be manufactured domestically by the turn of the decade.

PM Modi was speaking after inaugurating the 10th edition of Aero India, major aviation industry conference, in Bengaluru where more than 250 Indian companies and 300 foreign firms are participating this year.

Defence ministers, senior officials, and hundreds of business leaders from around the world are also in attendance at the largest ever AeroIndia, where Modi government's Make in India programme is in the spotlight.

Modi told hundreds of foreign and local businessmen that his government would favour domestic firms when awarding defence contracts as part of a larger push to boost India's manufacturing sector.

"We have the reputation as the largest importer of defence equipment in the world," the Prime Minister said at the biennial Aero India show.

"That may be music to the ears of some of you here. But this is one area where we would not like to be number one," he added.

"We are reforming our defence procurement policies and there will be a clear preference for the equipment manufactured in India."

India, which has long been the world's largest buyer of defence equipment, is in the midst of revamping its ageing military hardware and recently lifted a cap on foreign investment in defence.

But while his right-wing government has pledged to push forward with planned military purchases which stalled under the previous Congress government, Modi is also determined that the ramp-up in firepower is not at the expense of the domestic defence industry.

The Prime Minister said the country needs to increase its defence preparedness and modernise its forces due to security challenges and invited foreign firms to become India's strategic partners rather than remaining just sellers.

"Our security challenges are well known, our international responsibilities are evident, and we too need to increase our defence preparedness. We do have to modernise our defence forces. We have to equip ourselves for the needs of the future where technology will play a major role," he said.

He said government's focus is to reduce imports and develop domestic defence industry with a sense of mission which it "is at the heart of our Make in India programme".

"We will build an industry that will have room for everyone - public sector, private sector and foreign firms," he said, adding the intention of the government was to develop a dynamic 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.

The Prime Minister said India's defence industry will succeed more "if we can transform the manufacturing sector in the country".

Stressing on the need for reducing imports, Modi said, "If we could raise percentage of domestic procurement from 40% to 70% in next five years, we would double the output in our defence industry".

He also said studies have shown that even a 20 to 25% reduction in imports could directly create additional 100,000 to 120,000 highly skilled jobs in the country.

Modi also spoke about involving country's scientists soldiers, academia, industry and independent experts more closely in research and development.

Modi said as a nation of one billion people India also has a huge requirement for managing internal security.

"We are increasingly integrating technology and systems into it," he said.

Expressing confidence that India would emerge as a major global centre for defence industry, Modi also promised conducive business environment for domestic as well as foreign players, including a discrimination-free tax system.

"We must ensure that our tax system does not discriminate against domestic manufacture in comparison to imports," he said.

"We need great infrastructure, sound business climate, clear investment policies, ease of doing business, stable and predictable tax regime, and easy access to inputs."

The five-day air show, which is held at an air base on the northern outskirts of the city, attracts the bosses of hundreds of aviation and defence firms, including Boeing and the French firm Dassault.

(With AFP and PTI inputs)