Make in India: Government places defence order worth Rs 2 lakh crore

NEW DELHI: Government has placed defence order worth Rs 2 lakh crore under buy and Make in India category to boost local manufacturing sector, a senior government official today said.

"In the last one year, Rs 2 lakh crore worth order has been already placed under buy and Make in India category. This itself precludes a larger role of foreign investors and gives greater flexibility to domestic industry to participate in defence order," DIPP Joint Secretary Shubhra Singh said while speaking at Electronica India.

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She said that among 25 sectors identified for Make in India campaign, defence and aerospace are being increasingly looked upon as one of the most promising segments to push indigenous manufacturing.

"... over next seven years, there is expected spend of $130 billion on defence forces and additional $110 billion on homeland security. This is a type of opportunity before domestic manufacturers and also for foreign investors," Singh said.

She said in service core to defence sector, there will be higher planned capital spend in future.

"It is important that the aerospace and defence industry leverage ESDM (Electronic System Design and Manufacturing) policies to drive down operation cost," Singh said.

As per a report by India Electronics and Semiconductor Association in partnership with Roland Berger, Indian aerospace and defence market is the 7th largest globally with strong demand emanating across the triad of user services.

At a sub-system level, the total opportunity for electronics sector that emerges in user service segment is about $58 billion over next 12-15 years considering platform requirements for the user services, the report said.

"This is the right time to investment in India. There are incentives under MSIPS which have attracted investments but it is not as per expectation," TRAI Chairman RS Sharma said while recalling his experience as Secretary for the Department of Electronics and IT.

Defence Research and Development Organisation Director KD Nayak said that designing and making of defence equipment in India is important to generate trustworthiness in products.

"About 50-53 per cent Defence equipment are being made in India. DRDO production value is around Rs 1.7 lakh crore and our target is to reach 70 per cent of production by 2018. In electronic sector, we are good in design but poor in manufacturing. We are in transitional phase," Nayak said.

He said that private sector needs to invest in research and development and develop intellectual property right.

"In Defence sector you have to take some risk. Stringent requirements are there. It requires different product design than what is required in commercial space. If you to reach 70 per cent of Defence manufacturing, private sector will have to come," Nayak said.