Defence Minister Rajnath Singh invites US firms to help India meet export targets - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Friday 22 April 2022

Defence Minister Rajnath Singh invites US firms to help India meet export targets

$2.5 bn defence exports to US in last 5 years; which is 35% of all defence exports


By Ajai Shukla

Business Standard, 22nd Apr 22


Orders from US companies have boosted India’s defence exports and created employment in India, said Defence Minister Rajnath Singh.


He said Indian firms have exported “around $2.5 billion to US in the last five years, which is 35 per cent of total defence exports achieved during the period”.


Even so, India remains well short of the manufacturing and export targets specified in the Ministry of Defence’s (MoD’s) Defence Production Policy of 2018 (DProP 2018), which sets as its aim: “To achieve a turnover of Rs 1,70,000 crore (US $26 billion approximately) in aerospace and defence goods and services by 2025… creating employment for nearly two-to-three million people.”


Also distant is the DProP 2018 export target: “To achieve export of Rs 35,000 crore (approximately US $5 billion) in defence goods and services by 2025.”


The defence minister was addressing the American Chamber of Commerce in India (AMCHAM India) through video conferencing during its 30th Annual General Meeting on Wednesday. Established in 1992, AMCHAM-India – an association of US business firms operating in India – has over 400 US companies as members. 


Rajnath exhorted American companies to take advantage of Prime Minister Narendra Modi’s policy initiatives, such as “Atmanirbhar Bharat” (self-reliant India), and carry out joint R&D, co-production, co-development, investment promotion and develop maintenance, repair and overhaul (MRO) facilities in India.


“Of late, some US companies have expanded their local presence in partnership with Indian industry to achieve our aim of ‘Make in India, Make for the World’. We believe this is just a beginning. With increasing business, we aspire for increased investments by US companies in India,” Rajnath Singh said.


The defence minister said that Indian and US firms needed to make full use of the Industrial Security Annexure (ISA) to participate in each other’s defence supply chains.


The ISA was signed in December 2019 to facilitate the exchange of classified information between the defence industries of both countries. This was followed by an ISA summit in New Delhi between September 27 to October 01, 2021 to develop protocols for exchanging classified information between the two defence industries.


The minister listed out initiatives taken by New Delhi to facilitate partnerships between US “original equipment manufacturers” (OEMs) and Indian companies. 


“From increase in “foreign direct investment (FDI) limit to improving ease of doing business and from encouraging innovation through the iDEX platform to an enhanced positive list to give fillip to manufacture in India, the government is sharply focussed on enhancing the share of defence manufacturing, export by India-based companies and joint ventures,” he said. 


Terming defence as “a strong and growing pillar of the bilateral relationship”, Rajnath said that US-India defence ties “are built on foundational agreements, military-to-military engagements, cooperation in enhancement of defence capabilities, defence trade and technology cooperation, mutual logistic share and now a new emphasis on co-development and co-production.”


The defence minister also talked up rise in US-India bilateral trade in goods over the last year, which surpassed $113 billion (CUT).


Rajnath Singh also revealed that, during the 2+2 ministerial meeting on April 11, “India and US confirmed their intent to advance cooperation in critical and emerging technologies such as advanced communication technology, artificial intelligence, quantum science, STEM, semi-conductors and biotechnology.”

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