‘75% of defence capital outlay to be spent on domestic procurement’

India will spend 75 per cent of the total defence capital outlay for procurement from domestic defence manufacturers in 2023-24, Defence Minister Rajnath Singh said on Wednesday in a significant decision aimed at boosting the indigenous production of various weapons and military platforms.

The move will mean setting aside around Rs one lakh crore for procurement from domestic sources out of the total defence capital outlay of Rs 1,62,600 crore announced in the Union Budget for the next fiscal, officials said on the sidelines of Aero India here.

Separately, Aero India witnessed the firming up of 266 partnerships including 201 MoUs, 53 major announcements, nine product launches and three transfers of technology (ToT) pacts - worth around Rs 80,000 crore.

“If you take one step, the government promises to take 10 steps forward. You spoke of land to run on the path of development. We are providing you the full sky,” Singh said at the event “Bandhan ceremony” where the pacts were formally inked.

According to official data, the value of India’s indigenous defence production from 2019-20 to 2021-22 was Rs 2.58 lakh crore. In 2020-21, the government had set aside 58 per cent of defence capital outlay for procurement from the Indian defence industry. It was increased to 64 per cent in 2021-22. The allocation was further enhanced to 68 per cent in 2022-23.

“The trust of the government and the society in our defence industry is increasing rapidly. The share of procurement from Indian vendors last year was 68 per cent. Inspired by the ‘Amrit Kaal’, that share has been directly increased to 75 per cent,” he said.

The defence minister described the decision to enhance the allocation for the domestic industries as a “very significant” one for the overall growth of the domestic defence sector.

“After this step, our defence industry will move forward with even more enthusiasm and will contribute to making the country’s defence manufacturing sector more powerful and prosperous,” Singh said.

“It is a matter of great pleasure that Aero-India 2023 witnessed this unprecedented decision,” he said. Singh said the Aero-India 2023 inspired all the stakeholders to take a resolution that “we will not get tired anywhere on the path of our progress”.

The defence minister said that Aero India showcased to the world the ‘New Defence Sector’ of ‘New India’, which has not only grown in the last few years, but is now fully ready to walk alongside the defence sectors of leading countries.

He expressed satisfaction that the event paved the way to strengthening the Indian defence industry, terming it as the beginning of a new era of ‘Aatmanirbharta’.

He exuded confidence that the sector will move forward strongly on the path of progress with new energy and determination.

The 14th edition of Aero India at the Yelahanka Air Force station complex on the outskirts of Bengaluru was inaugurated by Prime Minister Narendra Modi on Monday and saw the participation of over 700 defence firms and representatives of around 100 countries.