India announced the increase in FDI limit on defence from existing 49 per cent to 74 per cent. 'These decisions will encourage both private and public sector industry to increase indigenous content in the inventory'. India is an important market for the global defence industry

New Delhi: Reform measures in defence sector announced by Finance Minister Nirmala Sitharaman to promote the domestic defence industry will help boost production and research in the military sector, said DRDO chairman Dr G Satheesh Reddy.

Calling it a major step towards self-reliance, the DRDO chief hailed the decision to ban imports of certain weapons and platforms, indigenisation of imported spares and budget allocation for indigenous capital procurement.

Sitharman, who held the defence portfolio in the first Narendra Modi-led government, announced the increase in Foreign Direct Investment (FDI) limit on defence from existing 49 per cent to 74 per cent.

'These decisions will encourage both private and public sector'

Apart from the creation of a negative import list, Sitharaman also made a separate budget allocation for acquiring indigenous capital goods.

With these decisions, big importance will be given by the private and public sector industry to do research and development in the field of advanced systems, said Reddy.

The DRDO chairman believes that these sweeping reforms will not only encourage both private and public sector industry to increase indigenous content in the inventory of armed forces but will also help India become self-reliant in the sector.

India top three importers of military hardware

One of the top three importers of military hardware, India remains an important market for the global defence industry.

From the acquisition of Rafale fighter jets from France, Apache AH-64 E and the Chinook CH-47F (I) from the US to the S-400 Triumf advanced surface-to-air missile system from Russia, many more major deals are currently in the pipeline.

As per the Union Budget for the financial year 2020-21, Rs 4,71,378 crore was allocated for Defence with a lion’s share given to the Army, the Navy and the Indian Air Force.

According to a report by Stockholm International Peace Research Institute (SIPRI), India’s defence spending stood at USD 71.1 billion in 2019, a third highest after the United States and China.