In February, Defense Minister A.K. Antony said India would reconsider its policies on defense production and procurement to lessen reliance on imported weapons and make vendors more accountable. India opened its defense industry for 100% private sector participation, subject to licensing, in 2001. Under the new rules, the defense ministry has added more clarity to the licensing process by saying that dual-use items will not require licensing.
The government’s decision was welcomed by the Federation of Indian Chambers of Commerce and Industry (Ficci). “Clarity in the definition of indigenous content and resolution of issues related to taxes and duties with respect to the private sector are welcome steps,” said Didar Singh, Ficci’s secretary general.
The current Indian administration is stressing private participation in the defense sector, and big industrial houses such as the Tata Group, Reliance Industries, Mahindra and Larsen & Toubro are entering the defense manufacturing sector.
India currently makes 70% of its defense purchases from foreign companies.
India took the lead from China in 2011 as the world’s largest arms importer and has remained there, according to the rankings of Sipri, a Stockholm-based defense think tank.
India has spent 782 billion rupees ($14.5 billion) on arms imports since April 2009 from countries including the U.S., Russia, Israel, Germany and the U.K., according to the defense ministry.
AW101 photo: AgustaWestland