As the standoff between India and China continues since May last year and clashes continue to erupt along the border, the Indian Ministry of Finance released a report on the Economic Survey 2020-21 on May 29, stating that the Indian Army has fast-tracked at least 180 billion rupees ($2.5 billion) of material purchases to meet urgent needs.
According to The Hindu, the report was submitted to the lower house of parliament by the Indian Ministry of Finance on June 29. The report noted that the trend of underutilization of the defense budget was reversed from fiscal year 2016. India’s fiscal year 2016 refers to the fiscal year between April 2016 and March 2017.
Talking on Jan. 15, India’s Army Day, Indian Army Chief Manoj Mukund Naravane said 38 deals worth about 50 billion rupees (about $700 million) were completed through the Emergency and Fast Track last year, and procurement worth 130 billion rupees (about $1.8 billion) was also completed.
Since the standoff between Indian and Chinese troops in eastern Ladakh in May last year and the ongoing conflict between the two sides, the Indian military has urgently procured from the United States high-altitude winter logistics supplies such as warm winter clothing, Food, lubricants, spare parts, medical supplies and ammunition, as well as high-altitude tents and fuel for the local border guard force.
In October 2020, Indian Army Commander Naravan (center, back row) inspected the former base in Tala. He appreciated their high morale and readiness. (Photo: Twitter image)
Also last July, Indian Prime Minister Narendra Modi used his emergency powers to authorize the Air Force to urgently procure from France a batch of medium-range air-to-ground missiles that can attack any bunker to increase the ground-attack capability of the Rafale fighter aircraft. The medium-range air-to-ground missile is known as the HAMMER (Highly Agile Modular Munition Extended Range).
The report said that in promoting indigenous manufacturing of weapons, the Defense Public Utilities Department and ordnance factories are working to increase the share of homemade manufacturing of weapons and equipment. As of March 31, 2020, the share of indigenous manufacturing of weaponry reached 74.56%.
The Indian government has also continued to promote private sector participation in defense manufacturing, and as a result, the share of outsourcing by the Indian Defense Public Sector Division and Ordnance Factories has reached 41.7 percent based on gross ordnance product in fiscal year 2019, allowing for greater participation by private military industry.
Over the years, India has developed a broad base of suppliers to the defense industry, including a large number of small and medium-sized enterprises and large corporations, the report said. Exports produced by the Ordnance Factories Board, the Defense Public Sector Division and the private sector, as authorized by India’s defense production department, increased from Rs 46.82 billion in fiscal year 2017 to Rs 91.16 billion in fiscal year 2019.
Since opening up participation in the defense industry to the private sector since 2001, the Indian defense sector has approved 44 foreign direct investment (FDI) proposals and authorized joint ventures between the public and private sectors to produce various defense equipment. As of September 2020, India’s Department of Industry and Domestic Trade Promotion has also issued 496 industrial licenses to private companies authorizing the production of various munitions.
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