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India’s premier apex industries chamber, the Associated Chamber of Commerce and Industry (ASSOCHAM) and the consultation major Ernst & Young have taken out a paper which suggests that the Indian government must fund 80 per cent of Defence Research and Development Organizations (DRDO) projects since defence research, design and development involves risk that cannot be taken by the private sector.
As per the paper by ASSOCHAM and Ernst & Young, the current spending by India in research and development in defence is roughly 4 per cent of the budget. ASSOCHAM has pointed out that if India is vying to be a global player and wishes to enter the international market, it will need some serious funding in its export driven products and will need to create export specific variants of its high end systems.
ASSOCHAM President, Mr. Sajjan Jindal, indicated that the DRDO could focus on basic research related to strategic defence equipment while the private sector should be engaged in defence R&D especially in products design and development. The private sector can be used to commercialise and market defence research. ASSOCHAM has also stated the need to lay down structured and time bound approach to development projects and involvement of the private sector from the beginning, which is at the inception stage of the project itself.
According to the Ernst & Young and ASSOCHAM, export policies must be developed. There is a need to make the Indian domestic defence industry competitive enough to sustain Indian defence industry’s demands and also meet export orders. In order to make defence exports a success, competition in the domestic market must increaser which will lead to competitiveness. Increased private sector participation will only make domestic market more competitive.
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