‘Investments Are Slow In Defence As There Is No Predictability'

ECONOMIC ADVISER in the Ministry of Defence, Rajib Kumar Sen is credited with formulating policies on defence offsets. He is also closely associated with the budgeting plan for the Indian armed forces. In an exclusive chat with Manish Kumar Jha, Sen talks about the Draft Defence Production Policy and offsets and how changes in it will enable domestic manufacturers to meet high quality military hardware requirements. 

- Manish Kumar Jha

The Draft Defence Production (DDP) Policy 2018 aims to make India one of the world’s top five defence manufacturing hubs by 2025 with self-reliance in 13 areas and achieve exports of Rs 35,000 crore ($5 billion). How realistic is the vision?

This has been drafted keeping the future in mind. It is not yet approved, but the process is on. I think it is a very good document to follow. It is a bit ambitious but I think we have to be ambitious if we have to achieve something, specially the export target of Rs 35,000 crore, which may look very high but there his potential. I think it makes a lot of sense to try achieving these goals.

Assuming the economy grows at 7 per cent on an average, in order to achieve the export target stated in the draft policy, the defence sector will have to grow at 15-20 per cent on a consistent basis. Is the target unrealistic?

It has nothing to do with percentages. As you know, the defence sector has lots of negative areas. For instance, we cannot buy from certain countries, we cannot sell to certain countries. It is not as if we are factoring in only economic growth. For instance, we are buying so many things from Russia, and we are also opening up to the US – the US has technology and sharing has started. So, we are looking at countries that are friendly towards us, especially the Asean and African countries. There is a lot of scope for export as many of the exportable items already exist with us. Some of these items have yet to be fully indigenised but we are in the process of doing so. So, given these capabilities I don’t’ think that the export target will be dependent only on high economic growth. We are in a position to exploit and increase our exports within the current rate of economic growth.

How do you think it’s possible? We would like to understand why we have not attracted enough FDI in defence?