“We do need to increase our defence preparedness. We do have to modernise our defence forces,” he said. “If we could raise the percentage of domestic procurement from 40% to 70% in the next five years, we would double the output in our defence industry,” he said.
Modi said even a 20-25 per cent decrease in defence import can create 2 lakh jobs. Also, a 25 percent hike in domestic defence output can create 1 lakh skilled jobs, he said.
Modi said the Centre was keen to expand the role of private sector for Indian defence production and that preference would be given to defence products made locally.
“We have to equip ourselves for the needs of the future, where technology will play a major role,” he added. “We must ensure that our tax system does not discriminate against domestic manufacture in comparison to imports,” he said.
Emphasising that India will emerge as a major global centre for defence industry, Modi said, “This is the beginning of a new era for the defence industry in India.”
“We want to develop an industry that is dynamic. It should constantly stay at the cutting edge of the global industry. We will build an industry that will have room for everyone – public sector, private sector and foreign firms,” he added.
And to do that, he said there was a strong need to involve scientists soldiers, academia, industry and independent experts more closely in research and development. “We need to go beyond the government for research and development, and also involve armed forces.”
Modi termed Aero India as a platform that “reflects a new level of confidence within our country and global interest in India”.
Modi promised ease in defence procurment and said all bottlnecks will be cleared to achieve that result. “We must ensure that our tax system does not discriminate against domestic manufacture in comparison to imports.”
“We have raised the permitted level of FDI to 49 per cent. This can go higher, if the project brings state-of-the art technology. We have permitted investments up to 24 per cent by FIIs. And, there is no longer a need to have a single Indian investor with at least a 51 per cent stake.”
On private sector’s role in the industry he said, the government is expanding its role, even for major platforms. “Our goal is to provide a level playing field for all.”