Finance minister Nirmala Sitharaman on Tuesday announced 68 per cent of the capital procurement budget for the defence sector will be earmarked in 2022-23 for local industry. The number is up from 58 per cent in the last fiscal year.
The decision aims to reduce the country's dependence on imports of defence equipment and have a more 'self-reliant' defence sector under the Aatmanirbhar Bharat initiative. "68% of the capital procurement budget for Defence to be earmarked for domestic industry to promote Aatmanirbhart," she announced during her Budget speech in Parliament.
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She also announced that defence research and development (R&D) will be opened for industry, start-ups and academia. Private industry will be encouraged to take up the design and development of military platforms and equipment in collaboration with Defence Research and Development Organisation (DRDO) and other organizations through the special purpose vehicle (SPV) model, the Union finance minister also said.
The major increase in the spending comes as the country is countering the threat posed by China and Pakistan. Since April 2020, the Indian Army is in a stand-off with China's People's Liberation Army (PLA) in eastern Ladakh. The government has held several rounds of talks with the Chinese officials, however to no resolution as of yet.
{{/usCountry}}The major increase in the spending comes as the country is countering the threat posed by China and Pakistan. Since April 2020, the Indian Army is in a stand-off with China's People's Liberation Army (PLA) in eastern Ladakh. The government has held several rounds of talks with the Chinese officials, however to no resolution as of yet.
{{/usCountry}}The disengagement process is due in areas of Hot Springs, Depsang bulge and Demchok in eastern Ladakh. Each side currently has around 50,000 to 60,000 troops along the Line of Actual Control (LAC) in eastern Ladakh.