The central government Monday announced it would liberalise foreign equity in defence production and would also encourage private investment in defence.
"My government will carry out reforms in defence procurement to increase efficiency and economy. It will encourage domestic industry, including the private sector, to have a larger share in design and production of defence equipment," President Pranab Mukherjee said addressing the joint sitting of both houses of parliament.
"We will introduce policies to strengthen technology transfer, including through liberalised FDI (foreign direct investment) in defence production," he said.
Mukherjee said India can emerge as global platform of defence manufacturing.
"With readily available skilled human resource, India can emerge as a global platform for defence manufacturing, including software, which will strengthen our defence and spur industrial development as well as exports," he said.
India is the world's ninth biggest military spender, according to Stockholm International Peace Research Institute's (SIPRI) report of world military expenditure for 2014.
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Mukherjee said the armed forces will be modernised and manpower shortages will be addressed on priority.
"We will strengthen defence preparedness by modernising our Armed Forces and addressing the shortage of manpower on priority," he said.
He added that recognising the importance of coastal security, the government will set up a national maritime authority.
Mukherjee, while saying the country is proud of its armed forces, added that the government would do everything to repay the debt of the brave and selfless soldiers.
"It will appoint a Veterans Commission to address their grievances, so that they know that we don't stop caring for them when they retire from active service," he said.
The president also said that the government will build a National War Memorial to honour the gallantry of our soldiers and One Rank, One Pension scheme will be implemented.