MoD is pushing for enhancing PPP in domestic production
The Indian Defence market represents accessible cumulative capital and revenue acquisition opportunity of US$306.95 billion from 2021 to 2030, said a ResearchAndMarkets report “Privatisation Thrust and Geopolitical Situation Transforming the Indian Defence Market”.
India aims to increase its defence production output to US$25 billion, including exports of US$5 billion. Simultaneously, the FY 2021-2022 defence budget’s capital allocation was hiked by 18.7% to provide for modernisation, said the report.
The Indian defence market is at the cusp of a revolution, with the introduction of policy changes that promise to reduce program delays and speed up acquisition. Provisions such as allowing leasing of equipment and waiver of offset requirements in government-to-government deals also hold promise in the upcoming decade, according to the report.
The Ministry of Defence (MoD) has also set a target of doubling defence production and increasing defence exports by five times by 2025.
To ensure that these goals are achieved, the MoD is pushing for enhancing private-sector participation to create a level-playing field and is also taking other steps such as corporatisation of Ordnance Factory Board. Successful implementation of the envisaged measures will have a long-lasting effect on the defence industry and the competitive landscape.
Defence Public Sector Undertakings (DPSUs) that have not delivered as per expectation have traditionally dominated the Indian defence market. As a result, India imports an estimated 70% of its defence needs. The acquisition cycle has also been long blamed for being inefficient resulting in delayed or cancelled contracts, said the report. #makeinIndia #manufacturing #investment #technology #exports #MSMEs /fiinews.com
