“Make in India”

Abstract

The Narendra Modi government made indigenous production an overriding priority of its defense policy. Initial policies promoted private Indian defense firms, streamlined arms procurement and pushed the military to accept inferior technology so long as the equipment was Indian manufactured. After two years the Modi government modified and diluted these policies. Its 2016 Defence Procurement Policy laid out four paths for defense procurement with differing technology transfer requirements. The most important was the strategic partnership policy, which envisaged joint ventures between Indian and foreign defense manufacturers for large platforms such as submarines and fighters. The new policies and goals place U.S. defense firms at a disadvantage. Stringent U.S. regulations on technology sharing, the degree to which U.S. equipment is networked and the relatively higher prices run counter to New Delhi’s new rules and priorities. The U.S.’s importance as a strategic partner means India will continue to purchase equipment directly from Washington, but movement towards a genuine defense technology partnership will require policy adjustments on both sides.