India@100: Gunning For ‘Make In India’

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India today is the largest importer of arms and ammunition in the world with about 70 per cent of our defence requirements still being met through imports. The balance 30 per cent is largely manufactured by Defence Public Sector Undertakings and the Ordnance Factories. Our immediate challenge, therefore, is to reverse this ratio by increasing indigenous procurement to at least 70 per cent in the next 3-5 years.

While increased focus on defence spending is imperative from strategic and geo-political perspectives, our armed forces currently face critical shortages of equipment. The dependence on foreign supplies for key technologies and platforms has rendered India’s national security vulnerable. We have in the past been at the receiving end of technology denials and have encountered serious problems of life cycle support for imported equipment. As a result, our armed forces are facing shortages in several areas such as ammunition, modern assault rifles, bullet-proof jackets, howitzers, helicopters, submarines and fighter aircraft squadrons.

The high dependence on imports has thus been a matter of serious concern over the past several years. That is a key reason for shift in emphasis to permit a greater role for the private sector in defence production. Several steps have been taken to encourage Indian companies to participate in defence procurement. These have eventually culminated in the Defence Procurement Policy (DPP) 2016, which is the result of an inclusive consultative process between the government, armed forces, Defence PSUs, Ordnance factories, R&D establishments, industry associations and private sector companies. DPP 2016 laid notable emphasis on institutionalising, streamlining and simplifying the defence procurement procedures to give a boost to the government’s ‘Make in India’ initiative.

While so far our defence preparedness was to a significant extent dependent on our ability to source requirements of critical systems, equipment and components from abroad, we are now entering a phase where the emphasis is shifting in favour of indigenisation and import substitution.


The emphasis on domestic manufacturing has already started to result in increased private sector investments in defence production. These will, in turn, result in large employment opportunities of the kind that are needed in the country, which is a key objective of the government’s ‘Make in India’ initiative. The government’s decision to leverage the experience, skills and capabilities in Indian manufacturing companies will not only result in greater self-reliance but will also serve as a launch pad to propel India to become a global defence manufacturing base and a large exporter of defence products. Achieving this objective will require all stakeholders to closely work together through intense networking and synergising their capabilities. While cross fertilisation of knowledge and information has already begun, we expect it to gather faster momentum in the years ahead.

The strength of a country’s military capabilities has been a key barometer to measure the strength of its economy. Most developed countries in the world today have a strong defence manufacturing industry. As India aspires to become a fully developed country in the next 10-15 years, we expect our military capabilities will also grow exponentially because of which our country will gain in global respect, standing and stature.

Over the past few years, there has been a discernible shift in economic power in favour of developing countries. We expect this trend to also reflect in growing military capabilities of major emerging economies. The relative state of a country’s defence preparedness would perhaps be determined on its ability to develop, absorb, innovate and deploy new technologies. This is an area in which India already possesses a measure of competitive advantage. Our challenge would be to continuously hone and harness these capabilities so that we remain at the cutting edge of technology for which we will need to make sizeable long-term investments.

Globally there is a growing focus on developing futuristic weapon systems such as stealth platforms, unmanned combat systems, smart ammunitions, sensors and electronic warfare, advanced avionics, etc. India initially has to collaborate with leading nations in order to assimilate such capabilities. Inclusion of a new provision in DPP 2016 that would identify few Indian companies to be strategic partners of the government in the development of futuristic platforms is a step in this direction. India will then have the opportunity to create building blocks that would enable it to leverage its inherent strengths in manufacturing – large domestic market, supportive government policies for domestic manufacturing, vision of its entrepreneurs, intellectual capital of its engineers to innovate at frugal costs, ability to integrate information technology into manufacturing – to not only achieve self-reliance in defence production but to also become a major defence supplier to global markets for such sophisticated high-technology products.

I am quite confident that at least 10 Indian companies engaged in manufacture of defence products will rank among the largest Fortune 500 companies in the world by 2050. I also expect to see several ‘Made in India’ products integrated into futuristic military platforms across the world. We believe this is a realistic aspiration for which we can work together and achieve our goal.

Securing the country’s sovereignty and safeguarding our geo-political interests are key national priorities. While we are confident of our present state of defence preparedness, we will need to continuously work on enhancing our capabilities to transform India into a powerhouse for end-to-end manufacture of defence products with an ecosystem that nurtures innovation and adaption of modern technologies to determine global leadership in this industry.

The author is CMD, Bharat Forge