Rajnath invites US companies to set up manufacturing units in India and develop technology collaborations

Gandhinagar, October 21, 2022

Defence Minister Rajnath Singh on Thursday invited US companies to set up manufacturing units in India and develop technology collaborations with Indian industries to create a global supply chain free from vulnerabilities and uncertainties.

The Minister was addressing a seminar jointly organised by the US-India Business Council (UIBC) and the Society of Indian Defence Manufacturers (SIDM) as part of the 12th DefExpo here. The seminar was organised on the theme "New Frontiers in US-India Defence Cooperation: Next Generation Technology, Innovation & Make in India".

Rajnath Singh stated that the Indian defence industry has been witnessing transformative changes for the last eight years through progressive reforms. He said these reforms have created a conducive environment for the growth of the Indian Industry through transparency, predictability and institutionalisation of several measures for Ease of Doing Business.

He emphasised that the path to "Aatmanirbhar Bharat" (Self-Reliant India) is a comprehensive set of policy frameworks that seek to build indigenous technological and production capacity & capability with cooperation, participation and collaborations with reputed institutions and Original Equipment Manufacturers (OEMs) from friendly nations.

“The main objective is to fulfil the requirements of the Indian Armed Forces and at the same time, create long-term linkages to the global supply chains of the foreign OEMs to meet global demands. Through these linkages, India looks forward to collaborating for a secure and resilient global supply chain for the free world to ensure uninterrupted and reliable access to defence equipment and other strategic materials for our nation and our partners, including the US. As India’s defence base grows, private sector companies from the US can explore the vast potential for ‘Creating in India’ and ‘Exporting from India’,” he added.

The Minister highlighted several steps taken by the Government to achieve the objective, including an increase in the number of procurement categories to encourage greater participation by the Indian Industry and attract foreign companies to manufacture in India.

“We are delighted to work with the US, our valued partner, to strengthen our commercial and strategic relationship and to attract US investment for creating a high-technology defence production ecosystem in India. For India, collaboration with US companies would be an important strategic force multiplier, apart from being wealth and job creator,” he added.

Rajnath Singh termed the easing of FDI regulations and introduction of Buy (Global–Manufacturer in India) in Defence Acquisition Procedure 2020 as an invitation for US businesses to participate in the opportunities offered by the Indian defence industry. He asserted that US companies can now set up manufacturing facilities, individually or in partnership with Indian companies, through a Joint Venture or technology agreement etc., to capitalise on the "Make in India" opportunity. He exuded confidence that the firms will find India to be an attractive investment destination for defence manufacturing.

He described the Positive Indigenisation Lists, in which a wide spectrum of equipment/systems are included, as another major step towards creating a mature defence industrial base in the country. The list has also given impetus to domestic Research & Development by attracting fresh investment into technology and manufacturing capabilities by providing a measure of demand assurance to the manufacturers in India.

Defence exports were a key pillar for the long-term sustainability of the domestic defence industrial base. Domestic demand alone may not always provide economies of scale to make profitable and sustainable investments. The $5 billion dollar export target set for 2025 reflects the intent of the Government for export-oriented manufacturing, he added.

He described the project agreement to co-develop Air-Launched UAVs, under the auspices of the India-US Defence Technology and Trade Initiative, as a welcome development. Industries from both sides can explore additional DTTI projects such as counter-unmanned aerial systems and an Intelligence, Surveillance, Target Acquisition and Reconnaissance platform.

Indians have played a stellar role in the technological development of the US, be it in the IT sector, biotechnology, space or cyber technology, besides contributing to the fields of business and finance. The US provides a conducive environment for talent to perform and has reaped the benefits, he said.

Rajnath Singh urged US business and technology leaders to collaborate with Indian industries to create a similar growth miracle in India.

Developing new avenues to work together at the industrial, scientific and academic levels will be key to ensuring that India-US defence ties remain dynamic, he added.

NNN