Observations were made by Defence Minister during the inauguration of Defence Manufacturing Complex of a private sector company, NIBE Group’ at Shirdi, Maharashtra.
- ‘Suryastra’, India’s first 300 KM Universal Rocket Launching System was also flagged-off.
Significance of Private Sector Participation in Defence
- Fostering Economic Resilience and National Security: In present times of weaponisation of trade and supply chains to even rare earth minerals.
- Empowerment and Employment: Boost MSMEs, small-scale industries and local economy along with empowering them with cutting edge technological skill sets.
- Defence Research: Income, technological and production capabilities of the private sector could be leveraged in research and development activities.
- Defence Entrepreneurship: It would avoid bureaucratic hurdles commonly encountered in government institution and state owned companies.
- Promote Indigenisation: India targets ₹3 lakh crore in defence production by 2029.
Key Reforms to Push Private Participation in Defence
- Liberalized FDI Policy: Foreign Direct Investment (FDI) up to 74% FDI allowed through automatic route.
- Priority for Domestic Procurement: Procuring capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020.
- Defence Industrial Corridors: Set up in Uttar Pradesh and Tamil Nadu to boost defence manufacturing.
- Industry as Partner: Promotes collaborative ecosystem involving private sector companies, start-ups, and MSMEs through initiatives like Innovations for Defence Excellence (iDEX), etc.
