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The Kelkar Committee felt that such integration would provide for greater
involvement of private players in the manufacture of defense equipment, which,
in turn, would result in greater indigenization of defense manufacture.
The Committee report also recommended that the government identify entry points
for private players in the defense sector and promote small and medium sized
companies involved in defense production.
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Pranab Mukherjee, then Defense Minister of India, in
his address at a seminar organized by the FICCI in 2005, also emphasized
the need for a strong and healthy partnership between the public and
private sector in strengthening India's defense capability, and in
sustaining a powerful domestic industrial base for the future.
A paper on 'Avenues for Private Sector Participation in Defense'
submitted to the Defense Ministry in early 2007, by the Associated
Chambers of Commerce and Industry of India (ASSOCHAM) highlighted the
need for a review of the procurement practices of the defense sector to
make them more efficient. This measure would prove beneficial to both
the Indian economy and the private sector companies involved in the
production of defense equipment it said. The paper also sought larger
private sector participation in all defense related deals.
In spite of these developments, the 70% self reliance target set by the
Defense Ministry in 1997 is still a long way off. As of early 2007, it
was estimated that India has achieved only 30% self reliance in defense
production. It is worthwhile to consider whether promoting larger
participation by the private sector in defense production will help in
this matter.
The private sector companies involved in the production of defense
equipment have suggested that they should be treated on a par with
public sector companies where the awarding of defense contracts is
concerned. This, they say, would ensure greater participation by leading
corporate houses in the production and supply of defense material.
If the Kelkar Committee's recommendations are implemented and the
suggestions made by ASSOCHAM are followed, India could witness the
emergence of private firms, which would not only manufacture advanced
defense equipment for the Indian Armed Forces but also export their
products on the lines of BAE Systems of Europe and Lockheed Martin of
the US.
References and Suggested Readings
1. "Press Notes/Seminars," www.defstand.gov.in, March 21, 2002
2. "One Year of UPA government: Major Decisions and Initiatives -
Defence," www.pib.nic.in, May 15, 2005
3. "Indian Defense Industry: Forging A Public-Private Partnership,"
www.ficci.com, June 8, 2005
4. "6,000 Cr Wasted, 10-yr Delay & They Want 150,000 Cr More,"
www.indianexpess.com, November 12, 2006
5. "India's Defense Imports to Reach $30 bn by 2012,"
www.hindustantimes.com, May 13, 2007
6. "Defense Imports to Reach $30 Billion," www.mumbaimirror.com, May 14,
2007
7. "Business Opportunities," www.aeroindia.in, May 22, 2007
8. "Defence Production and Supplies," www.mod.nic.in, May 25, 2007
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