$5 trillion economy target can be achieved by increased pvt. sector participation in defence manufacturing : Rajnath

Speed Post News Network

New Delhi : Defence Minister Rajnath Singh on March 7, 2020, called for an increased participation of the private sector in defence manufacturing to realise the Government’s vision of making India a $5 trillion economy by 2024. In his address at the ET Global Business Summit here, Rajnath said that the manufacturing sector has the potential to reach $1 trillion by 2025 and the Government is striving to achieve the goal by implementing key flagship programmes like ‘Make in India’, besides building policies relevant to the digital-economy and fostering human-capital.

Urging the defence industry to make best use of the emerging opportunities, Rajnath said that the government has effected  a slew of structural reforms to create increased synergy between the industry and the public sector to overcome the challenges of private investment in defence. He listed out several steps taken under the ‘Make in India’ initiative including greater scope for domestic industry in defence tenders, simplification of the industrial licensing process, hike in FDI cap, making defence export less stringent, streamlining the defence offset policy, opening the government-owned trial and testing facilities for the private sector; setting up of two defence industrial corridors, and promotion of innovation through participation of start-ups and small and medium enterprises.

“In our envisaged Defence Production Policy, we have clearly spelt out our goal to achieve a turnover of $26 billion in aerospace and defence goods and services by 2025. This will have huge implications for India’s endeavours to promote R&D, innovation and its efforts to secure a place in global supply chains,” Rajnath said, according to a PIB release. He added that the necessity of becoming internationally competitive, globally innovative, and structurally efficient demands that the private sector plays a crucial role in defence production.

Rajnath underlined that while the primary aim of Defence production is to cater to the needs of the Armed Forces, thrust is also being given on enhancing exports. He said that the Defence Public Sector Undertakings have been encouraged to increase their export portfolio to 25 per cent of their turnover and the Government is willing to extend Lines of Credit and grants to friendly foreign countries over the next five years. “The government aims to achieve exports of defence goods & services to the tune of $5 billion in next five years. All possible support would be extended to the private sector so that they can contribute significantly to enable us achieve the said target,” he added.