Roadmap for Answer Writing
- Introduction:
- Briefly introduce India’s defense sector, highlighting the need for indigenization, domestic procurement, and boosting defense exports.
- Mention the importance of these areas for national security and economic growth.
- Institutional and Policy Changes Driving Indigenization:
- Defense Procurement Procedure (DPP) 2016: Discuss the introduction of the ‘Buy Indian-IDDM’ category to prioritize indigenous defense equipment.
- Defense Acquisition Procedure (DAP) 2020: Explain the emphasis on increasing indigenous content in defense procurements.
- Indigenization Policies: Highlight the success of the policy, such as the indigenization of 1,499 items in 2020-21 against a target of 1,244.
- Bilateral Agreements: Mention key agreements such as the one signed in 2019 for joint manufacturing of spares and components with Russia.
Relevant Fact: Between 2016-2020, 86 capital acquisition proposals were categorized under the ‘Buy Indian-IDDM’ category.
- Domestic Capital Procurement Measures:
- Budgetary Support: Explain the 25% earmarking for domestic procurement from the capital acquisition budget (2022-23) to support private industry.
- Support for Startups: Mention the Rs. 1,500 Crore allocated for procurement from startups to encourage innovation in the defense sector.
Relevant Fact: Rs. 1,500 Crore was allocated for procurement from startups in 2022.
- Defense Exports and Promotion Measures:
- Streamlined Export Process: Discuss the steps taken to facilitate defense exports, such as the Defense Exim Portal and defense export promotion cells.
- Promotional Events: Talk about initiatives like the Aero India exhibitions to enhance defense exports.
Relevant Fact: Defense exports grew by 32.5% in 2023-24.
- Challenges in the Defense Sector:
- Production Shortfalls: Explain that production has not met the requirements of the armed forces, with domestic procurement stagnating around 60% over the last decade.
- Technology Gaps: Discuss the gap in technological capabilities for manufacturing major systems, critical parts, and raw materials.
- Private Sector Participation: Highlight challenges such as the lack of long-term contracts and complex procurement procedures hindering private sector participation.
- Skilled Labor Deficit: Mention the shortage of skilled labor, especially in fields like aeronautical engineering, cybersecurity, and robotics.
Relevant Fact: Private sector contribution to total defense production is only 22% in FY 2024.
- Conclusion:
- Summarize the achievements and challenges, stressing the need for further collaboration between government, private sector, and academia.
- Mention the importance of continued investments in research, development, and skill enhancement to address the challenges and meet India’s defense needs.
Key Facts to Include:
- Imports and Exports Data: India’s arms imports dropped to 9.8% (2019-2023) and defense exports grew by 32.5% in 2023-24.
- Indigenization Success: 1,499 items indigenized in 2020-21 against a target of 1,244.
- Defense Budget Allocation: 25% of the domestic capital procurement budget was earmarked for the private sector in 2022-23.
- Private Sector Contribution: The private sector contributes only 22% of total defense production in FY 2024.
Model Answer
India’s defense sector has seen significant changes through strategic institutional and policy measures that have facilitated indigenization, domestic capital procurement, and defense exports.
1. Defense Indigenization:
The Government of India has taken several steps to reduce reliance on imports and foster indigenization:
2. Domestic Capital Procurement:
India has allocated significant resources to support domestic defense industry growth:
3. Defense Exports:
India has actively promoted defense exports, resulting in a 32.5% year-on-year growth in 2023-24:
Challenges Remaining: Despite these efforts, challenges persist:
Addressing these challenges will require further collaboration between the government, industry, and academia, with enhanced investments in R&D and skill development.
Highlights