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OpINION FEBRUARY 18, 2022 | The Indian Eye 10

India–Israel defense trade and

defense Indigenization

India’s defense market is one of the biggest in the world and there is space and scope for cooperation with critical

strategic partners like Israel to continue to grow to fulfil the varied requirements of the Indian armed forces

S. SAMUEL C. RAJIv

he Ministry of Defense (MoD)
is laying a lot of stress on de-
Tfense indigenization, domestic
procurement and defense exports.
During the period 2015–2021, over
60 per cent of capital procurement
contracts of the MoD by number (190
out of 304) and 43 per cent by value
(Rs 1,39,038 crore out of Rs 3,21,376
crore) were secured by the domestic
industry.
The government’s Aatmanir-
bhar Bharat Abhiyan (ABA) aims to tember 2020. 2021, the first such project to be pur- Courtesy: IDSA
unlock the potential of the domestic The Strategic Partnership (SP) sued under this model.
industry and manufacturers to meet model, first promulgated as part of The foreign direct investment the 23rd position as the global arms
the country’s growing requirements. the Defense Procurement Procedure (FDI) through automatic route is per- exporter by SIPRI in 2020, the first
The ABA call has special significance 2016, is an effort to energize the do- mitted up to 49 per cent and beyond time that India made it to the list. The
for the defense sector, as the country mestic defense industrial ecosystem. that with government approval. The aim is to achieve defense exports tar-
has long been dependent on imports The model seeks to encourage domes- FDI limit was raised from 49 to 74 per get of US$ 5 billion by 2025. With a
to fulfil most of its platform as well as tic industry to enter into tie-ups with cent in August 2020. The total FDI in strong domestic defense industry and
niche equipment requirements. global original equipment manufac- the defense sector till January 2021 a strong exports profile, India aims to
To foster innovation and technol- turers (OEMs) to set up manufactur- was Rs 4,191 crore. It is pertinent to become an essential part of the global
ogy development in the defense and ing and infrastructure supply chains note that a significant portion of this, defense value chain. At the same time,
aerospace sector, the iDEX—Inno- with transfer of technology (ToT). The Rs 2,871 crore, was received since the aim is to reduce the country’s de-
vation for Defense Excellence, was Defense Acquisition Council (DAC) 2014. The government has approved pendence on defense imports. India
launched in April 2018. Four Defense approved the issue of Request For 44 FDI proposals in the defense sector. has spent over US$ 36 billion (SIPRI
India Start-Up Challenges (DISC) Proposal (RFP) for construction of India has also made rapid strides TIV) on imports during 2010–20.
have been held so far, in which over six conventional submarines, in June in defense exports. India was listed at Over 90 per cent of imports were from
1,000 Start-Ups have participated. Russia (accounting for 63 per cent),
Budgetary support of Rs 500 crore the US (11 per cent), Israel (8 per
has been earmarked for iDEX till cent), France (7.5 per cent) and the
2025–26, for Start-Ups, MSMEs and UK (3 per cent). During 2015–19, In-
individual investors, through the De- dia accounted for more than 9 per cent
fense Innovation Organization (DIO), of global arms imports. It is pertinent
an umbrella organization formed with to note, however, that India’s arms im-
financial contributions from the aero- ports between 2011–15 and 2016–20
nautics major, Hindustan Aeronautics fell by 33 per cent.
Limited (HAL) and Bharat Electron- Given this policy framework, what
ics Limited (BEL). will be the impact on India’s key de-
In the 2021–22 defense budget, fense relationships with strategic part-
Rs 1,000 crore has been exclusive- ners like Israel? It is instructive to look
ly earmarked for procurement from at the Srijan Defense indigenization
Start-Ups. Currently, over 80 Start- portal, which became active in August
Ups are developing more than 30 cut- 2020.8 The portal lists items which have
ting-edge products. The government been procured from foreign original
aims to double the number of prod- equipment manufacturers (OEMs)
ucts developed by Start-Ups to at least by the DPSUs, ordnance factories and
60 by 2024. In order to more actively Service headquarters. The domestic
involve the stakeholders in developing Indian Defence Minister Rajnath Singh along with then Chief of Defence Staff industry is encouraged to engage and
cutting-edge products most suited to General Bipin Rawat launches MoD’s portal SRIJAN on the final day of ‘Atmanirbhar Week’, in partner with the private sector in order
the requirements of the armed forces, New Delhi in August last year (ANI) to assist in the indigenization efforts
iDEX4Fauji was also launched in Sep- Continued at next page... >>

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