India spends a significant amount of resources on its national defence. Efficiency in utilisation of resources is not only an economic imperative but vital for defence preparedness. In view of this, the Defence Economics and Industry Centre was created in 2006 to promote research on various economic aspects of India’s defence. Since its inception, the Centre has undertaken a number of policy relevant studies besides constantly engaging vital stakeholders (Ministry of Defence, Armed Forces and Industry) on a range of issues. The major focus areas of the Centre are:
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India’s power in the next round of politics among nations will stem not simply from the latest purchase of military goods, but also from the manner in which it has amassed them.
The prospects of allocation for the next year being less than the allocation for the current year are remote because of the immense implications it would entail, although it is likely that the growth in the budgetary allocation for the next fiscal may be less than what has been the case in the past.
It is time that India’s offset regulations and defence procurement procedures are weeded for provisions formalising differential treatment against Indian bidders.
MoD has to assume the leadership role and provide some kind of a single-window service to the defence industry to steer the offsets in a direction that helps achieve the objective of modernisation through self-reliance.
On the capital side, there may not be much of an adverse impact of reduction in allocation if the MMRCA contract gets pushed to the next year. On the revenue side, procurement of ammunition and other equipment as well as maintenance of legacy systems would be adversely affected.
A thorough and honest review of the progress made so far is essential for arresting the drift in the Defence Production Policy and for course correction.
This commentary looks at the characteristics of Saab’s recent investments as well as the prospect and challenges for current and future Swedish-Indian collaboration in the defence industrial sector.
Some of the provisions in the DOG do not seem to be well thought out, provide greater leeway to the foreign companies, and have a potentially negative potential on eligible manufacturing sector, particularly defence manufacturing.
FMECA of equipment is an effective scientific tool to identify the assemblies, sub-assemblies and components that are critical for the satisfactory performance of equipment.
Entrusting the final appraisal of financial attributes to the Ministry of Finance may bring about a more open, dispassionate, integrative, and authoritative decision-making system.
