Boost for indigenous manufacturing

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Updated: March 3, 2015 4:11:50 PM

Inaugurating Aero India 2015, Prime Minister Modi reiterated his ‘Make in India’ campaign by stating...

Inaugurating Aero India 2015, Prime Minister Modi reiterated his ‘Make in India’ campaign by stating that his government did not want India to be the biggest importer of defence equipment in the world. He promised to double the output of defence manufacturing in the country. The Budget provides the government an opportunity to look at the defence industry in India and prioritise the goals for this sector, so that the vision can translate into reality.

For boosting the Indian defence industry and providing a fillip to the vision of ‘Make in India’, some critical factors will have to be the focus. Lockheed Martin supports the government of India’s goal of indigenising the defence industry via a strategy of creating more opportunities for local manufacturing, which, in turn, will reduce dependency on imports. This will have a two-fold benefit for the exchequer. The outflow of precious foreign exchange will reduce, as more and more defence equipment is manufactured in India itself. Secondly, as defence manufacturing increases, it will have a positive impact on job creation, as well as provide tax revenue to the government.

We at Lockheed Martin are already invested in Indian defence manufacturing. Our joint venture with Tata Advanced Systems in Hyderabad manufactures large aerostructures for the global supply chain of C-130J. The first C-130J with an Indian tail flew in October last year.

We welcome the announcement by the government to increase the FDI cap in defence industries from 26% to 49%. The government has also indicated further relaxation on a case-by-case basis for state-of-the-art technologies.  Most companies will consider each investment decision on its own merit though, and the business case supporting it will determine the levels of investment that should be made by all partners.

By Phil Shaw, CE, Lockheed Martin India

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