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Topic : Defence Production in India hits record high in 2023-24
GS-3 Mains : Defence
Defence Production in India hits record high in 2023-24
Context
- The value of defense production in India reached ₹1,26,887 crore in FY 2023-24, a 16.7% increase over FY 2022-23.
Growth in Defence Production
- Since 2019-20, the value of defense production has grown steadily by over 60%.
- Public sector contributed 79.2% of the total production value in 2023-24, while the private sector contributed 20.8%.
India’s Defence Sector
- India’s defense budget of US$ 74.7 billion ranked 4th globally in 2024.
- India aims for US$ 6.02 billion worth of annual defense exports by 2028-29.
- Defense exports grew 32.5% to ₹21,083 crore in FY 2023-24.
Advantages of Increased Production
- Self-reliance: Reduces dependence on arms imports and strengthens self-defense capabilities.
- Strategic Advantage: Enhances India’s geopolitical position as a net security provider.
- Technological Advancement: Boosts other industries and the overall economy.
- Reduced Economic Drain: Lessens reliance on imports, saving foreign exchange.
- Job Creation: Generates employment opportunities in manufacturing and allied sectors.
Challenges
- Limited Private Participation: Lack of a conducive financial framework restricts private sector investment and innovation.
- Technological Dependence: India lacks capabilities in design, R&D, and critical component manufacturing.
- Coordination Issues: Overlapping jurisdictions between ministries hinder efficient production.
Government Initiatives
- IDR Act Reforms: Streamlined Industrial License requirements for defense manufacturing.
- iDEX & DTIS Schemes: Promote innovation within the defense & aerospace sector.
- FDI Reforms: Increased FDI allowance to 74% through automatic route and 100% through government route.
- Defense Industrial Corridors: Dedicated zones in Tamil Nadu and Uttar Pradesh for defense manufacturing clusters.
- DPEPP 2020: A policy framework to enhance domestic defense production capabilities.
- Make in India Initiatives: MoD prioritizes domestic procurement to boost indigenous production.
- Green Channel Status Policy: Expedites clearances for private sector participation.
Way Forward
- Continued focus on attracting private sector investment and technological advancements.
- India’s growing number of defense tech startups (around 194) offer promising prospects for innovation.
- Government’s emphasis on easing foreign investment restrictions aligns with the goal of an “Atmanirbhar Bharat” (self-reliant India) in defense.
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