Defence Production Policy, 2018


  • Ministry of Defence has released the new Draft Defence Production Policy 2018 (DProP 2018). The DProP 2018 has embarked on an ambitious journey to mark India’s position among the top defence production countries in the world. The DProP 2018 is focused on self-reliance and seeks to change its position as the largest importer of arms in the world. Under the ‘Make in India’ initiative, the Ministry of Defence aims at making India a global leader in defence production.
  • The Ministry has also invited comments and suggestions before 30th March 2018. It also intends to finalise the Defence Production Policy 2018 by next month.

Takeaways from Draft Defence Production Policy 2018:

1.) The vision of the DProP 2018 very strongly suggests that it intends to make India belong to the top five countries in the world in Aerospace and Defence industry. It pushes for increased indigenisation of defence production not just for purposes of self-reliance, but also to widen India’s export to other nations.

2.) DProP 2018 seeks to reduce current imports and achieve self-reliance by domestically designing and manufacturing fighter aircraft, medium lift and utility helicopters, warships, missile systems, surveillance systems, arms & explosives etc by the year 2025. By aiming a turnover of Rs 1,70,000 crore, it seeks to create employment for more than 3 million people.

3.) The policy also attempts to make it easier to do business. It calls for increased participation of MSMEs, start-ups and other players from the private sector in the defence industry. It has also planned strategies, portals and platforms such as ‘Competency Mapping’, ‘Defence Investor Cell’ and ‘Technology Perspective Capability Roadmap’ to facilitate indigenisation of defence production.

4.) The document also seeks to take advantage of the fact that India has emerged as a “top destination for Research & Development (R&D) in the world”. It proposes that India utilise this opportunity and catapult itself as a hub for defence related Intellectual Property (IP).

5.) The Simplified Make-II would be facilitated easily through this draft policy and will it launch itself as an initiative to make it easier for industries to enter defence sector.

6.) The policy will also liberalise licences that will be provided to defence industries. The draft also says that the requirements for renewal of licences will be pruned and that companies with a track record will be given favourable consideration. The policy will also liberalise the FDI regime in the defence sector.

7.) DProP 2018 creates open competition in the industry. By opening the sector to private players, the policy is determined to create a driving force for increased productivity and innovation. By inviting the private actors, the Ministry sees an opportunity to maximise returns on money.

8.) The broad policy accelerates domestic defence production and thereby makes it feasible to have a market of our own. Indigenous defence production will attract more investors which eventually will lead to massive market creation.

9.) The Government also wants greater interaction between private and public sector. This policy aims at fusing together technologies from Ordnance Factory Board, Defence Public Sector Undertaking and private players. It aims at advancing and boosting the existing public sector defence production units through skill development and overall program management.

10.) Lastly, apart from synergising all stakeholders and creating self-reliant defence sector, the policy also plans to export defence goods worth $5 billion to other countries. It also plans on setting up Defence Export Organisation in partnership with the industry and market domestically produced goods overseas.

Source:Economic Times

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