PM Narendra Modi urges industry to play a larger role in defence

In an unscheduled appearance at a Ministry of Defence (MoD) webinar that even caught Defence Minister Rajnath Singh by surprise, Prime Minister Narendra Modi delivered an 18-minute speech on Thursday, talking up the government’s “self reliant India” policy in defence and urging private industry to play a larger role.

“For many years, India has been the world’s biggest importer of defence equipment,” said Modi, blaming it on the failure of earlier governments. This, he said, was changing, repeatedly invoking the confidence of a “New India”. 

“When India got Independence, it had enormous capability as a defence producer. At that time, there was a defence production ecosystem that had been established more than a century earlier,” said Modi.

In fact, only the most rudimentary defence production facilities existed at Independence: a handful of ordnance factories that produced low-tech stores such as clothing and ammunition; and a couple of shipyards with no ability to build modern warships. “There were very few countries that had the capabilities and potential that India had. But it is India’s misfortune that, for decades, nobody gave this matter the attention it deserved… And many countries that started after us overtook us and went far ahead in the last half century,” said Modi.

“But now, the situation is changing. You would have experienced that, in the last few years, it has been our effort to throw off the shackles in this sector.”  

Modi laid claim to a list of achievements: more manufacturing, new technologies, and a larger role for the private sector. “We have reformed the licensing norms in defence manufacturing, created a level playing field, simplified export procedures, reformed offset rules and many other such measures,” said Modi.

“I believe that, even more important than these reforms is that we are all experiencing a new mindset towards defence issues in the country. A new mindset has been born,” said the PM.

 “For creating a modern and self-reliant India, it is essential to have an attitude of self-confidence in the sphere of defence. For a long time, the country had been considering having a Chief of Defence Staff, but nobody was able to take a decision. This decision emblemizes the self-confidence of the New India,” he said.

 “For a long time, foreign investment was not permitted in defence production. It started being permitted during the Atal (Behari Vajpayee) government. After our government came in there was further liberalisation and now, for the first time, we are opening the doors for 74 per cent FDI in this sector under the automatic route. This is because of the self-confidence of the New India.”

“For decades, Ordnance Factories were run like government departments… Now we are moving towards corporatising these factories… This is a manifestation of the self-confidence of the New India,” said Modi. He said the defence ministry was encouraging co-production through joint ventures with foreign partners. “Because of the size of the Indian market, production in India is the best option for our foreign partners. Our government has worked to the mantra of ‘reform, perform and transform.’ It has been our endeavor to eliminate red tape and spread the red carpet.”

 The PM stated that the entire world had seen India’s reforms, listing out the fields of Intellectual Property, taxation, insolvency and bankruptcy; and even in difficult spheres such as space and atomic energy.

 “We are also moving ahead on labour law reform. These reforms are not going to stop; they will continue,” said Modi.

Rajnath Singh said the MoD had allocated Rs 52,000 crore from the defence capital budget for domestic procurement. 

The CDS, General Bipin Rawat, said that a large number of additional items would be added to the “no-import list” of 101 items. “The list is going to increase, and we will have the next list by early next year… Gradually, as we see the private industry delivering, we will keep on adding more items to the list.”