US Companies Invited to Set Up Manufacturing Units in India & Develop Technology Collaborations to Create a Global Supply Chain Free from Vulnerabilities

· Collaboration with US Companies would be an Important Strategic Force Multiplier for India: Rajnath Singh at UIBC-SIDM seminar at DefExpo 2022

· $5 billion dollar Export Target Set for 2025 Reflects Our Intent for Export-oriented Manufacturing

Raksha Mantri Rajnath Singh has 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. He was addressing a seminar jointly organised by US-India Business Council (UIBC) and Society of Indian Defence Manufacturers (SIDM) as part of the 12th DefExpo in Gandhinagar, Gujarat on October 20, 2022. 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 stressed that 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.

The Raksha Mantri emphasised that the path to ‘Aatmanirbhar Bharat’ is a comprehensive set of policy frameworks that seeks to build indigenous technological and production capacity & capability with cooperation, participation and collaborations with reputed institutions and Original Equipment Manufacturers (OEMs) from friendly nations. He said, the idea is to manufacture in India for the Indian market as well as export to the friendly countries, i.e., ‘Make in India, Make for the World’.

“The main objective is to fulfil the requirements of 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’,” Rajnath Singh said.

The Raksha Mantri highlighted a number of steps taken by the Government to achieve the objective, including increase in the number of procurement categories to encourage greater participation of the Indian Industry and attract foreign companies to manufacture in India. “We are delighted to work with 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 the 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.

The Raksha Mantri 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, he said.

Rajnath Singh shed light on the importance of defence exports, terming it as 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 investments and sustain them, he said. The Raksha Mantri added that $5 billion dollar export target set for 2025 reflects the intent of the Government for export-oriented manufacturing.

The Raksha Mantri 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. He stated that industries from both sides can explore additional DTTI projects, such as a counter unmanned aerial systems and an Intelligence, Surveillance, Target Acquisition and Reconnaissance platform.

Rajnath Singh pointed out that Indians have played a stellar role in technological development of US, be it IT sector, bio-technology, space or cyber technology, besides contributing in the fields of business and finance. Stating that the US provides a conducive environment for talent to perform and has reaped the benefits thereof, he urged US business and technology leaders to collaborate with Indian industries to create a similar growth miracle in India. He stressed that 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.