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India To Increase Defence Procurement From Domestic Vendors To 75%: Defence Minister

Defence Minister Rajnath Singh Wednesday said the ‘trust’ between the government and the Indian defence industry has ‘significantly increased’.

by News Desk
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Bengaluru: Defence Minister Rajnath Singh Wednesday said the “trust” factor between the government and the Indian defence industry has “significantly increased”, as a result of which the share of procurement of arms from the local vendors will now be increased to 75 per cent from 68 per cent currently.

This 75 per cent defence capital procurement budget would translate into approximately Rs. 1 lakh crore worth of deals.“I believe the Indian defence industry is firmly on its path of strengthening. This is a new beginning with greater focus and emphasis on ‘Atmanirbhar’ or self-reliance and that has given India’s defence industry new energy and new commitment,” Singh said, addressing the valedictory session of Aero India 2023.

Singh said as many as 250 MoUs have been signed, including transfer of technology deals with the Defence Research and Development Organisation (DRDO), during the show. “The trust of the government on our defence industry has increased so much in recent years that the share of procurement from Indian vendors will be increased to 75 per cent in the coming year from 68 per cent last year,” he said.

In FY 2023-24, the Ministry of Defence (MoD) has been allocated a total Budget of Rs 5.94 lakh crore, which is 13.18 per cent of the total budget (Rs 45.03 lakh crore). Capital outlay pertaining to modernisation and infrastructure development has been increased to Rs 1.63 lakh crore.


The minister also said the Narendra Modi government had been increasing the share of procurement of arms and weaponry from the domestic vendors in a gradual manner. From 64 per cent in 2021-22, it was taken up to 65 per cent and then in 2022-23 it went up to 68 per cent, which will now stand at 75 per cent in 2023-24.

“We have understood that if the Indian defence industry has to move forward, it has to be given encouragement. So it is imperative for us to assure the industry of a steady demand for the products they produce,” he said. Singh added that this is the reason why in the financial year of 2020-2021 the government had reserved 58 per cent of the defence budget for capital procurement as that was specifically targeted as domestic defence companies. “It was a giant leap in favour of the Indian defence industry,” he said, adding that such a trend will continue.

Strong Domestic Industry Will Not Only Strengthen National Security But Also Boost Economy: RM

The minister said the domestic defence companies will also benefit by going for joint collaboration with the defence majors of “friendly countries” which also participated in big numbers in Aero India.

By promoting and providing support to the domestic industry, he said, the government not only aims to strengthen national security but also boost the country’s economy. Singh added that such steps were taken earlier also by previous governments but all efforts failed as the domestic industry “felt some kind of hesitation as they feared entering the sector”.

He said the steps taken by the government such as rolling out the policy of strategic partnership and increasing the limit of foreign direct investment were all aimed at giving support to domestic defence firms. The Valedictory Session also witnessed the forging of 266 partnerships including 201 MoUs, 53 major announcements, nine product launches and three Transfers of Technology, worth around Rs 80,000 crore.

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