Hindu Editorial Analysis : 18-January-2025

India’s defence sector is undergoing significant transformation, driven by efforts to modernize its armed forces, achieve self-reliance, and build strategic global partnerships. These initiatives aim to strengthen India’s military capabilities and elevate its position in the global defence market.

Budget Allocation for Modernization

The Indian government has allocated a capital outlay of ₹1.62 lakh crore for the fiscal year 2023-24. This funding is directed towards indigenous procurement to reduce the dependency on foreign suppliers and promote self-reliance. Such investments are a crucial part of India’s long-term vision to modernize its defence infrastructure.

Key Reforms in the Defence Sector

Several reforms have been introduced to enhance the defence ecosystem:

  • Liberalized FDI Policy: The Foreign Direct Investment (FDI) limit in the defence sector has been increased. Now, foreign companies can invest up to 74% through the automatic route and up to 100% with government approval. This aims to bring in modern technology and expertise.
  • Domestic Procurement Prioritized: Initiatives like Make in India and the Defence Acquisition Procedure (DAP) 2020 focus on encouraging domestic production and reducing reliance on imports.
  • Simplified Licensing: The government has extended the validity period for industrial licenses to streamline the process of defence production.
  • iDEX Scheme: This initiative promotes innovation in defence technologies by encouraging startups and micro, small, and medium enterprises (MSMEs) to contribute to defence R&D.
  • Indigenization Portal (SRIJAN): A platform that helps Indian industries and MSMEs collaborate on defence production.
  • Defence Industrial Corridors: Two major corridors, located in Uttar Pradesh and Tamil Nadu, aim to boost manufacturing and innovation in the defence sector.
Modernization of the Armed Forces

India’s armed forces are also modernizing rapidly:

  • Army: New equipment, such as Pinaka rocket launchers, Arjun Mark 1A tanks, and advanced rifles, are being inducted.
  • Air Force: The adoption of Tejas LCA aircraft and procurement of Rafale jets are strengthening India’s aerial capabilities.
  • Navy: Indigenous platforms, including INS Vikrant, INS Arighaat, and INS Tushil, are key additions to the Navy’s fleet, along with the expansion of advanced submarines.
  • Missile Systems: India is focusing on advanced missile systems like BrahMos supersonic cruise missiles and Akash Surface-to-Air Missiles (SAM).
  • Emerging Technologies: The integration of artificial intelligence (AI), cybersecurity, space-based assets, and quantum computing into defence operations is underway. DRDO (Defence Research and Development Organisation) is leading the development of unmanned systems, swarm drones, and hypersonic technology.
Opportunities in Defence Manufacturing

India’s defence sector offers numerous opportunities, particularly in manufacturing:

  • Indigenization: In FY24, 75% of the defence capital procurement budget is allocated for indigenous sources, promoting self-reliance.
  • Modernization: India plans to spend $130 billion over the next 5–7 years on modernizing its defence fleet.
  • Cost Savings: Manufacturing in India is cheaper compared to Europe and North America, providing cost-effective solutions for defence production.
  • Strong Supply Chain: Over 350 major manufacturers and 10,000 MSMEs are actively involved in the sector, strengthening the supply chain.
Key Challenges in the Defence Sector

Despite these positive developments, there are several challenges:

  • Dependence on State-Owned Enterprises: Public sector undertakings dominate the defence production sector, accounting for about 85% of output. This limits the potential efficiency gains from private sector involvement.
  • Indigenous Technology Development: Developing advanced military technologies, such as the Kaveri engine for aircraft, has proven to be a challenging task.
  • Slow Modernization: Delays in technology upgrades and procurement processes can hinder the timely modernization of the armed forces.
  • Export Controls: India’s defence exports must be carefully managed, especially considering geopolitical complexities, such as the potential use of Indian ammunition in unintended conflict zones like Ukraine.
  • Strategic Balancing: India must balance its defence partnerships with countries like the USA, France, and Russia while maintaining strategic autonomy.
  • Bureaucratic Hurdles: Delays in approvals and poor inter-agency coordination continue to slow progress in the sector.
Future Vision for Defence

Looking ahead, India has ambitious goals for its defence sector:

  • Global Ambitions: India plans to establish the Bharatiya Antariksh Station (BAS) by 2035 and achieve an Indian-crewed lunar landing by 2040, signaling a major leap in space defence capabilities.
  • Advanced Launch Vehicles: The development of next-generation launch vehicles will enhance India’s capabilities in space and missile defence.
  • Enhanced Manufacturing: Expanding the capabilities of defence industrial corridors and increasing private sector participation are key priorities for future growth.
Why In News

India’s defence sector is undergoing significant transformation, driven by modernization efforts, self-reliance initiatives, and strategic global partnerships. These developments aim to enhance military capabilities and position India as a major player in the global defence market.

MCQs about India’s Transforming Defence Sector
  1. What is the primary goal of India’s defence modernization efforts?
    A. To increase foreign defence aid
    B. To reduce dependence on foreign suppliers and enhance self-reliance
    C. To focus solely on space technology
    D. To decrease military spending
    Correct Answer: B. To reduce dependence on foreign suppliers and enhance self-reliance
    Explanation: India’s defence modernization efforts are aimed at reducing its reliance on foreign suppliers and focusing on self-reliance, as part of the “Make in India” initiative and other domestic procurement reforms.
  2. Which of the following is a key reform introduced in India’s defence sector?
    A. Decreasing the FDI limit to 50%
    B. Privatizing all defence manufacturing units
    C. Increasing the FDI limit in defence to 74% through the automatic route
    D. Halting the procurement of new weapons
    Correct Answer: C. Increasing the FDI limit in defence to 74% through the automatic route
    Explanation: The Indian government has increased the Foreign Direct Investment (FDI) limit to 74% through the automatic route and up to 100% under the government route to attract modern technology and foreign investment in the defence sector.
  3. What is the focus of the Defence Industrial Corridors established in Uttar Pradesh and Tamil Nadu?
    A. Promoting tourism
    B. Boosting manufacturing in the defence sector
    C. Expanding agricultural production
    D. Developing space exploration technologies
    Correct Answer: B. Boosting manufacturing in the defence sector
    Explanation: The Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu are specifically aimed at boosting manufacturing capabilities in the defence sector by providing infrastructure and encouraging innovation.
  4. What challenge does India face in the development of advanced military technologies?
    A. The country has too many foreign defence partnerships
    B. Slow development of indigenous technologies like the Kaveri engine
    C. A lack of skilled workforce in the defence sector
    D. Excessive investment in civilian space programs
    Correct Answer: B. Slow development of indigenous technologies like the Kaveri engine
    Explanation: One of the key challenges India faces in its defence sector is the slow development of advanced military technologies, such as the Kaveri engine, which aims to power indigenous aircraft but has faced delays and difficulties.

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