Tuesday, 29 Sep 2020

India bans import of 100 defence items in bid to boost home-grown manufacturing

NEW DELHI (BLOOMBERG) – India will stop importing more than 100 items used by its armed forces in a bid to boost local manufacturing.

The ban will be implemented gradually, starting with products such as sniper rifles and light-combat helicopters in December this year and long-range land-attack cruise missiles in December 2025, the Ministry of Defence said in a statement on Sunday (Aug 9).

Similar items worth 3.5 trillion rupees (S$64 billion) were imported between April 2015 and August 2020 and it is estimated that contracts worth almost four trillion rupees will be placed with domestic manufacturers within the next seven years, Defence Minister Rajnath Singh said in a series of tweets.

Faced with disruptions to raw material supplies from China because of the coronavirus pandemic, millions of job losses following a nationwide lockdown, and a severe erosion of public revenue as economic growth slumps, Indian Prime Minister Narendra Modi has ratcheted up calls to boost local manufacturing and reduce reliance on imports.

Many of the items on the embargo list – which includes communication satellites, conventional submarines and light machine guns – are in the research and development stage, said Dr Laxman Kumar Behera, senior fellow at the New Delhi-based Manohar Parrikar Institute for Defence Studies and Analyses.

“Importantly, while assuring Indian industry, the government has kept the door open for foreign collaboration for technology transfer,” Dr Behera said by phone. “The move to stop imports is user driven, therefore there will be accountability.”

India in 2017 joined the United States and China as one of the world’s five biggest military spenders, reflecting geopolitical tensions as well as the country’s reliance on imported weapons and sprawling personnel costs.

Some products may be more expensive when produced locally. For instance the Su-30 Mki – the mainstay Indian fighter jets – produced in Russia are cheaper than the ones produced in India.

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