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India Among Top Defence Spenders in the World in 2015
Apr 20, 2016

The defence sector in India is a sunrise sector. India was among the top ten spenders on military expenditure in 2015, ahead of countries such as France, Japan and Germany. The total expenditure of $ 51.3 billion during the year constituted 3% of the global military expenditure. However, a significant share of the country's defence requirement is still imported. To encourage domestic production of defence equipment, as part of the initiative to boost manufacturing, the government has implemented a number of measures.

These include hike in foreign direct investment in the defence sector from 26% to 49%, streamlining in the defence industrial licensing, and rationalization of taxes and payment terms and steps to promote exports. Apart from this, the government has revived the defunct 'Make' procedure that was articulated in 2006 to promote growth of the private sector in the country's defence. Under the Make procedure, the government has already awarded a development contract for battlefield management system to a consortium of Larsen & Toubro (L&T) and Tata group. The government is contemplating to launch six to eight 'Make' projects every year.

Apart from this, for the first time the Defence Research and Development Organization (DRDO) has signed a technology transfer agreement with a private company, L&T, for the commercial production of Pilotless Target Aircraft. These developments have paved way for private sector companies to tap big-ticket deals in a sector that hitherto has been the exclusive domain for public sector undertakings and ordnance factories. While companies such as the Mahindra & Tata Groups, L&T have already been fortifying themselves in the past few years, even Reliance Infrastructure has been shifting its focus towards defence equipment manufacturing after it acquired Pipavav Defence last year.

Data Source:Business Standard,
Stockholm International Peace Research Institute

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