A huge gap exists between the requirements of Indian Armed Forces and the combined capabilities of the DPSUs and Ordnance Factories. The country is losing out precious foreign currency reserves, and we are unable to create more jobs in the sector, which has, potential of creating more than 600,000 direct and indirect jobs, says a report prepared by the CII National Defence Council.

The report further says that Private sector's active participation in defence production is the only way out. The ongoing military modernisation programmes and resulting procurements worth USD 100 billion over a period of next five years has made India one of the world's most lucrative defence markets. The defence industry must be given due attention and domestic private players should be encouraged to enter defence production. Government of India must bring in policies to promote investment and capacity building in this sector through five-pronged approach as suggested by this report. The increased push for private participation will enable domestic companies to build critical capabilities in areas that were heretofore excluded for them. The multiplier advantages that could accrue in a host of related sectors such as communications, manufacturing, automotive etc, could be enormous.

Among other things, the report prepared by the council headed by Mr Ajai Chowdhry, Founder and Chairman, HCL Infosystems, recommends the following:

• Set-up a National Defence Manufacturing Commission
• Pass an executive order with decision to use Make/Buy and Make (Indian) mandatory for flagship large programs with appropriate financial models
• Focus on capability building and creating enabling infrastructure
• Foreign Direct Investment (FDI):
• Set up Raksha Udyod Ratnas (RUR), and
• Create enabling infrastructure for capability building through government support

(Contact Ms Neelam Joshi, Media Desk, CII, New Delhi, Email: ciineelamjoshi@gmail.com)