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Why in the news?

• The Centre has established two Defence Industrial Corridors (DICs), one in Uttar Pradesh and one in Tamil Nadu. 

Details

• The Ministry of Defence identified six nodes in the Uttar Pradesh Defence Corridor and five nodes in the Tamil Nadu Defence Corridor for which lands have been acquired.
• Connecting Cities in Uttar Pradesh Defence Industrial Corridor (6):Lucknow, Kanpur, Agra, Aligarh, Chitrakoot and Jhansi.
• Connecting Cities in Tamil Nadu Defence Industrial Corridor (5): Chennai, Hosur, Salem, Coimbatore and Tiruchirapalli.

The aim of Defence Industrial Corridors

• The establishment of the DICs aims to boost the defence manufacturing ecosystem through synergistic technological development, as well as to promote the growth of private domestic manufacturers, including MSMEs and start-ups. Both DICs are still in their early stages.
• The Defence Acquisition Procedure is aimed at helping the country gain a stronger foothold on its production of arms and reduce dependence on external agencies.

Need or Defence corridors

• Need to Indianise defence production and achieve self reliance.
• With China and Pakistan as adversaries, there is a need to keep our armed forces modernised
• According to SIPRI, India, unfortunately, holds a distinction of being the world’s second-largest arms importer. Saudi Arabia surpassed India to become the largest importer. Notably, Russia is the largest arms supplier to India, accounting for 49% of India’s imports.
• This means that we are not only sending our money abroad but also that we are at the mercy of these modern countries when it comes to protecting our own country.

Significance

• Indigenous production will go up-In addition to promoting the Make in India campaign, the Defence Industrial Corridors will catalyse indigenous production of defence and aerospace-related items, reducing our reliance on imports and promoting exports of these items to other countries.
  • Indigenisation would help in furthering the objectives of ‘Make in India’ in the intermediate-term which is following the ‘Atmanirbhar Bharat Initiative’ of the government. In the long run, it would take India closer to its dream of ‘Make for the World’.
• Employment generation– The Defence Industrial Corridor has the potential to attract investment worth Rs 50,000 crore and create 2.5 lakh job avenues in the next five years.
• Make the Nation self-reliant for meeting our defence needs- The combined efforts of the Government of India and several private players will assist India in achieving its goal of defence self-sufficiency, generating direct and indirect employment opportunities, and stimulating the growth of private domestic manufacturers, Micro Small and Medium Enterprises (MSMEs), and start-ups.
• Improve the connectivity of the defence forces
• Encourage domestic production of defence equipment and benefit all small and medium manufacturers along the corridor.

Steps taken by the government to boost production and achieving self-reliance in the Defence sector

• Investments-Investments of approximately Rs 3,700 crore were announced by Ordnance Factory Board (OFB/Defence Public Sector Undertakings (DPSUs) & Private Industries for Uttar Pradesh Defence Corridors and investments of approx Rs 3,100 crore were announced by OFB/DPSUs & private industries for Tamil Nadu Defence Corridor.
• the Government has also appointed a consultant for the preparation of policy and Detailed Project Report (DPR) for these two Defence Corridors.
• Incentives to private players and foreign companies are provided under the respective state policies.
• FDI- The Government of India has enhanced FDI in Defence Sector up to 74% through the Automatic Route for companies seeking new defence industrial licenses and up to 100% by Government Route.
  • IDEX- In 2018, the government rose to this occasion and initiated iDEX (Innovations for Defence Excellence) to contribute towards the modernisation of the defence industry.
• iDEX aims to promote innovation and technology development in the areas of defence and aerospace while simultaneously engaging MSMEs, start-ups, individual innovators, R&D institutes and academia.
• DAP 2020- In 2020, the government announced a ban on 101 items and more aptly has announced that the list shall be progressively reviewed and expanded every year by the newly created Department of Military Affairs (DMA). Further, the DAP 2020 encourages FDI in defence to establish defence manufacturing hubs in the country. Notably, the indigenous content requirements have been raised in the DAP 2020.
• SRIJAN portal to promote indigenisation was launched in 2020. Items, which were earlier imported, have been displayed on the portal for indigenisation. It helps facilitate the indigenisation of the items as per extant procedures.

What needs to be done further?

• Expansion and exploration need to be done- Our defence equipment manufacturing should be explored and investigated to gain access to the global market. Efforts should be made to expand the defence equipment export market.
• Budgetary support to the industry-To encourage domestic production,  to tap the domestic market, India needs a firm policy and adequate budgetary support.
• Private participation to boost the production- To encourage their entry into the defence production sector, industry, particularly the private sector, has long sought special incentives such as infrastructure status for their investment and deemed export benefits for certain types of procurement.
• Skill gap should be done away– The Dhirendra Singh Committee report (2015) suggests several measures to close the skills gap, including changes to academic curricula, the establishment of institutions specialising in defence and security, and the training of a new generation of system integration managers.

Conclusion

• India has long been one of the biggest defence importers in the world and ruled that enough attention was not paid to augmenting domestic production in the past despite the country having inherited a capable ecosystem at the time of Independence. Atma Nirbhar Bharat’ is not inward-looking, but aimed at boosting India’s capabilities and global peace, and also for helping the world economy become more stable. Self-sufficiency in defence will be the single most important constituent of strategic independence and Atma Nirbharta.

Mains model question

• Extra efforts are needed to create a “defence industrial ecosystem” that will not only support the country’s military requirements but will also emerge as an important economic lever, generating exports, creating jobs, and spurring innovation. Discuss.

References

• https://pib.gov.in/PressReleasePage.aspx?PRID=1739058
• https://www.thehindu.com/brandhub/a-step-towards-self-reliance/article34554553.ece
• https://www.business-standard.com/article/current-affairs/india-s-self-reliance-in-defence-sector-to-boost-global-standing-pm-modi-120082701364_1.html