Industry status of India's defence will enhance the standard of products
India’s defense industry is on a revival mode. It was clearly visible in a recent ‘Defense Industry Interaction’ organised by Confederation of Indian Industry (CII) in New Delhi. It was fascinating to witness participation of a lot many Indian private companies irrespective of their size. All were geared up to face the global defense giants from US, UK and other countries. While some of them were aiming to crack bigger defense deals, rest were intending to expand their network or introduce some of their products in the international market. This was enough to create an impression that India’s defense industry is opening up and is no more an oligopoly market with a few PSUs ruling the roost.
A critical look at the Indian defense industry shows that, after Independence, only 14 ordinance factories were handling all the defense industrial production required. It later went up to 40 Defense Ordnance Factories and 8 Defense PSUs. Thus, the long lasting technology gap due to indigenous and inadequate design and production by state-run enterprises followed by sudden need of modern weapons due to threat from neighbourhood and also international sanctions imposed on more than 150 products after India’s nuclear tests affected the momentum of technological progress which prompted acquisitions from abroad. That is how Russia (accounts for nearly 70 per cent of the total purchases) and Israel became the largest partners apart from Germany, Italy and the US. At the same time, realising the need of private participation after a comprehensive report on ‘Reforming the National Security System’ by the Group of Ministers (GoM) in the early 2001, the Government of India undertook initiatives to allow 26 per cent Foreign Direct Investment and full private ownership by Indian entrepreneurs in the defense equipment production companies operating from India.
India’s defense industry is on a revival mode. It was clearly visible in a recent ‘Defense Industry Interaction’ organised by Confederation of Indian Industry (CII) in New Delhi. It was fascinating to witness participation of a lot many Indian private companies irrespective of their size. All were geared up to face the global defense giants from US, UK and other countries. While some of them were aiming to crack bigger defense deals, rest were intending to expand their network or introduce some of their products in the international market. This was enough to create an impression that India’s defense industry is opening up and is no more an oligopoly market with a few PSUs ruling the roost.
A critical look at the Indian defense industry shows that, after Independence, only 14 ordinance factories were handling all the defense industrial production required. It later went up to 40 Defense Ordnance Factories and 8 Defense PSUs. Thus, the long lasting technology gap due to indigenous and inadequate design and production by state-run enterprises followed by sudden need of modern weapons due to threat from neighbourhood and also international sanctions imposed on more than 150 products after India’s nuclear tests affected the momentum of technological progress which prompted acquisitions from abroad. That is how Russia (accounts for nearly 70 per cent of the total purchases) and Israel became the largest partners apart from Germany, Italy and the US. At the same time, realising the need of private participation after a comprehensive report on ‘Reforming the National Security System’ by the Group of Ministers (GoM) in the early 2001, the Government of India undertook initiatives to allow 26 per cent Foreign Direct Investment and full private ownership by Indian entrepreneurs in the defense equipment production companies operating from India.
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