PM Modi Promises Steps To Boost Defence Manufacturing Sector

BENGALURU: Making a strong pitch to end India's dependence on defence imports, Prime Minister Narendra Modi promised a conducive environment for manufacturers, including a discrimination-free tax system, and asked foreign firms not to be just "sellers" but "strategic partners".

Inaugurating the 10th 'Aero India' show here, the Prime Minister said while the country needs to increase its defence preparedness and modernise its forces due to security challenges that were well known, it should aim to manufacture 70 percent of military hardware domestically in next five years and remove the tag of being number one importer of defence equipment.

Stressing that developing domestic defence industry "is at the heart of the 'Make in India' programme", he said, "We will build an industry that will have room for everyone - public sector, private sector and foreign firms".

"From sellers, foreign firms must turn into strategic partners. We need their technology, skills, systems integration and manufacturing strength," he said.

He said the foreign players can use India as part of their global supply chain and India's frugal but sophisticated manufacturing and engineering services sectors can help reduce costs.

Also India can be a base for export to third countries, especially because of its growing defence partnerships in Asia and beyond, he said.

He said the government was reforming defence procurement policies and procedures.

"There would be a clear preference for equipment manufactured in India. Our procurement procedures will ensure simplicity, accountability and speedy decision making," he said.

Modi noted that his government has raised the permitted level of Foreign Direct Investment to 49 percent and this can go higher, if the project brings state-of-the art technology.

"We have permitted investments up to 24 percent by Foreign Institutional Investments. And, there is no longer a need to have a single Indian investor with at least a 51 percent stake. Industrial licensing requirements have been eliminated for a number of items. Where it is needed, the process has been simplified," he said.

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