The "Make in India" initiative has had a profound impact on India's domestic defence industry, driving significant changes in production capabilities, policy reforms, and strategic partnerships. Here are the key effects of this initiative:

Boost To Domestic Production

1. Increased Local Manufacturing: The initiative has led to a marked increase in domestic defence production. For the Financial Year 2023-24, 75% of the modernization budget was allocated for procurement from domestic sources, emphasizing a shift towards self-reliance in defence manufacturing.

2. Development of Key Platforms: The government has announced several major defence platforms for industry-led design and development, which encourages local firms to innovate and produce critical defence equipment. This includes weapons systems, aircraft, and naval vessels.

Policy Reforms And Investment

1. Liberalised FDI Norms: The initiative has relaxed foreign direct investment (FDI) norms, allowing up to 74% FDI under the automatic route and 100% with government approval in the defence sector. This has attracted international defence companies to establish joint ventures and manufacturing units in India, facilitating technology transfer and collaboration.

2. Support for Start-Ups and MSMEs: Programs like the Innovations for Defence Excellence (iDEX) scheme have been launched to engage start-ups and micro, small, and medium enterprises (MSMEs) in defence production. This focus on smaller firms is crucial for fostering innovation and enhancing competition within the sector.

Strategic Partnerships And Global Positioning

1. Global Defence Hub Aspirations: The initiative aims to position India as a global hub for defence manufacturing and exports. With significant policy reforms and strategic partnerships in place, India is moving towards becoming a competitive player in the international defence market.

2. Export Potential: The push for indigenization not only reduces dependency on imports but also opens avenues for exporting defence equipment. The government targets achieving a production value of ₹1,750 billion (approximately $26 billion) by 2025, including exports worth ₹350 billion (around $5 billion).

Challenges Ahead

Despite these advancements, several challenges persist:

Scaling Production: There is a need to significantly scale up production capabilities to meet the armed forces' procurement budgets effectively.

R&D Capacity: Enhancing research and development capabilities remains critical to reducing reliance on foreign technology and ensuring that domestic products meet international standards.

Procurement Processes: Streamlining procurement decision-making is essential to translate reforms into actual production outcomes efficiently.

The "Make in India" initiative has catalysed a transformation in India's defence industry by promoting indigenous production, attracting foreign investment, and fostering innovation among local manufacturers. While significant progress has been made, addressing existing challenges will be crucial for realizing the full potential of this initiative and achieving self-reliance in defence production.

IDN