Antony hints at major policy changes for defence industry

New Delhi, November 10, 2010

Defence Minister A K Antony today said the first ever Defence Production Policy would be unveiled soon and major changes brought about in the Defence Procurement Policy.

"2011 January onwards we hope to introduce the new Defence Production Policy as well as the Defence Procurement Policy. So now we are going to take some more drastic steps to achieve our goal of speedy indigenization," he said.

Mr Antony was speaking after presenting the Defence Minister's Awards for Excellence for the year 2008-09 to Ordnance Factories (OFs) and Defence Public Sector Underakings (DPSUs) here.

"Our aim is to have a strong defence industrial base in India, because a country like India cannot indefinitely depend on foreign suppliers for majority of our equipments," he said.

He said that, at present, 65-70 per cent of the equipments are imported and this trend had to be reversed. He said the Government would continue to support the PSUs but they alone would not be able to meet the requirements of the Armed Forces.

He recalled that the Government had earlier decided that public sector shipyards would have to compete with Indian private sector shipyards to get projects for the Indian Navy.

"So 'Buy Indian and Make Indian' is going to be the major component of our procurement policy. That will help us to have a strong defence industrial base in India," he said.

Mr Antony said there was plenty of space and opportunity for both the public and the private sectors to coexist and thrive.

He assured the DPSUs and OFs of full financial support for their modernisation plans but said they should be prepared to face competition from the Indian private sector from next year.

"There is no option, but to remain globally competitive and efficient and not rest on past laurels, or achievements," he "Both the Defence PSUs and the private sector must carve out respective niches for themselves, by developing their own fields of specialization. These specializations must complement each other’s efforts and thus generate an even more healthier and competitive environment," he said.

The Minister stressed on the need for R&D and constant coordination between the Defence Research and Development Organisation (DRDO) and the industry partners. "A growing nation like India, a nation aspiring for the membership of the Security Council, a place on the high table of the nations still depending heavily on foreign countries for supply of defence equipments is not good for us," he underlined.

Commending the OFs and DPSUs for the significant improvement in recent months, the Defence Minister said that it must lead to a further refining and development of technical skills and reliability.

During 2009-10, the 40 OFs produced a wide range of weapons and defence hardware amounting to Rs 8,751 crores while the total value of production by the nine DPSUs was Rs 28,703 crores, an official press release added.

NNN