Defence Acquisition Procedure 2020: Why UAE is on the trigger for Make in India
Historically, India’s defence requirements were typically met through imports. A report titled Trends in World Military Expenditure, 2019 indicated that with an expenditure of USD 71.1 billion, India was the third-largest military spender in the world, just behind the US and China. Since the introduction of Indian Prime Minister Narendra Modi’s ‘Make in India’ initiative in 2014, India has witnessed a gradual shift towards indigenous defence production. The country has pivoted its focus from imports, favouring in-country modernisation over the business-as-usual approach, in a bid to strengthen its economic policies and better serve its people.
From 2014 until end-2019, the Ministry of Defence (MoD) had signed more than 180 contracts with the Indian defence industry, valued at over USD 25.8 billion. The ‘Make in India’ programme has provided an impetus to the private sector and foreign Original Equipment Manufacturers (OEMs) to form strategic partnerships and cater to domestic as well as global markets.
The ‘Make in India’ initiative and more specifically, the Aatmanirbhar Bharat policies substantiate India’s focus on creating a prosperous country with an emphasis on augmenting domestic manufacturing and industrial capacity. In this direction, it reflects our own efforts in the UAE, where our fundamental priorities focus on diversifying away from an oil economy and building a local knowledge-based economy.
In a bid to modernise defence manufacturing and become self-reliant, India recently launched the new Defence Acquisition Procedure (DAP) 2020. The new policy further embeds the philosophy of ‘Make in India’ and ‘Aatmanirbhar Bharat’ in the field of defence production. DAP 2020 lays the foundation for prospective foreign companies to progressively manufacture and support the domestic ecosystem at the component level, stipulating that manufacturing must include at least 50 per cent indigenous content. This provides a renewed opportunity for companies such as Caracal to engage with India in the defence manufacturing sector on a different level.
The recommendations in DAP 2020 strike a balance between indigenous supply, self-reliance, domestic capability and the modernisation needs of the armed forces through import. We welcome this initiative and believe this can be a win-win for the Indian Ministry of Defence and manufacturers like ourselves, who are deeply invested in India. Not only are we prepared to supply quality weaponry that leverages cutting-edge technology, but also facilitate the transfer of technology and research and development facilities to India to build a more substantial ecosystem.
Since we appreciate the underlying rationale for in-country production, we have refocused our proposition to now start manufacturing 100 per cent in India.
The UAE and India have a legacy of strong bilateral relations and a long, shared history. As a strategic partner, we are supportive of India’s defence self-reliance and modernisation. We are confident that through technology transfer, facilitation of research and development, indigenous production, and local sourcing and partnerships, our present synergy with India – will only further reinforce our historic ties.