With the COVID-19 pandemic eviscerating the Indian economy, the government recently announced a stimulus which also contains a defence ‘Make in India’ (MII) package. The measures include:
- increasing the FDI percentage in defence manufacturing
- a negative list for imported weapons
- separate budget for Indian-made military equipment
- corporatisation of the Ordnance Factory Board (OFB)
- reform of defence procurement
The ‘Make in India’ programme is primarily being impelled by the imperative to reduce arms import bills and ‘optimise’ defence expenditure – India’s FY2019 defence budget of USD 71.1 billion was the highest in South Asia and the third-highest in the world, and for the past five years, it has been the world’s second largest arms importer.
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