Defence production in India registered 16.8% growth in terms of value as compared to 2022-23.
Key Highlights
- About 79.2% has been contributed by Defence Public Sector undertakings (DPSUs)/other PSUs and 20.8% by the private sector.
- Since 2019-20, value of defence production has been increasing steadily, and grown by over 60%.
- By 2028-29, annual defence production is expected to touch ₹ 3 lakh crore and defence exports ₹ 50,000 crore.
Reasons for record defence production
- Defence Production and Export Promotion Policy 2020 (DPEPP) and Defence Acquisition Procedure (DAP 2020) empowers Indian domestic industry through Make in India initiative.
- Foreign Direct Investment (FDI) limit has been raised to 74% through the Automatic Route and upto 100% under government route.
- Innovations for Defence Excellence (iDEX) scheme and indigenisation portal SRIJAN.
- Establishment of Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu.
Challenges faced by India’s defence sector
- Bureaucratic Inertia leads to delay in reforms as well as delivery of projects.
- Lack of technological depth to design/manufacture major systems and critical parts.
- Scalability issues: Present defence exports are mainly composed of spare parts and components.
- Budget issues and dependency on PSUs.
Way Forward
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