Budget set aside for boosting domestic defence buys: PM Modi

Prime Minister Narendra Modi on Monday said that a portion of the country’s defence budget for 2021-22 was reserved for buying locally produced weapons and systems to boost defence indigenisation, and stressed that the 21st century defence manufacturing ecosystem could not come up without the partnership of the private sector.

“It has been our endeavour since 2014 to bring about transparency, predictability and ease of doing business in the defence sector. We have taken several steps such as de-licencing, de-regulation, export promotion and foreign investment liberalisation,” the PM said at a seminar on ‘Budget Announcements 2021-22: Galvanising Efforts for Atmanirbhar Bharat’.

The PM spoke about the government’s negative import list that was released last year and which seeks to ban the import of 101 types of weapons, systems and ammunition over the next five years to promote self-reliance in the defence sector.

It may be described as a negative list but in the language of self-reliance, it is a positive list, he said. “It is a positive list on the strength of which our own manufacturing capacity is going to increase. This is a positive list that will create jobs in India… This is a positive list as it guarantees that products made in India will be sold in India,” Modi said.

This year, the government is likely to notify a second list of weapons, systems and ammunition that cannot be imported.

The PM said India should position itself as a defence exporter and take steps to boost its defence manufacturing capabilities as smaller countries will increasingly turn to India for their defence requirements.

“The changes in the world order have made smaller nations aware of the need to strengthen their defence. It is one of their primary concerns. It is natural for these nations to look to India to strengthen their defence capabilities,” he said, adding that India was exporting military hardware to 40 countries.

He said the country’s military leadership had fully supported reforms in the defence sector.

The defence minister said the ₹70,221 crore to be spent on domestic defence procurement this year accounted for 63% of the military’s capital budget. Last year, the ministry spent over ₹51,000 crore, or 58% of the capital budget, on domestic purchases.

“This increase will have a positive impact on enhanced domestic procurement, having a multiplier effect on our industries including micro, small and medium enterprises and start-ups. It would also increase employment in the defence sector,” Singh said.

Experts welcomed the move to allocate funds for domestic procurement.

“It’s a positive development, provided substantially important operational items are purchased through this route. Many joint ventures are working well including radars with Israel and BrahMos missiles with the Russians. Hindustan Aeronautics Limited is producing good helicopters. And, then there are the light combat aircraft variants. The unmanned systems of the private sector also hold potential,” said Air Marshal Anil Chopra (retd), director general, Centre for Air Power Studies.

On the second negative import list, the defence minister said the secretary, department of military affairs - General Bipin Rawat - should consider putting on the list certain parts that are being imported so that the items can be indigenised.