Government policies and initiatives encourage all foreign companies including Russian companies to set up their manufacturing facilities in the country through partnerships/joint ventures with Indian companies. So far, 42 FDI proposals and Joint Ventures (JVs) have been approved for the manufacture of various Defence equipments, both in public and private sector, which include 3 JVs with Russia, viz. M/s Multirole Transport Aircraft Ltd, M/s Indo-Russian Helicopters Ltd and M/s Indo Russian Rifles Pvt Ltd.
Recently, an Inter-Governmental Agreement (IGA) on joint manufacturing of spares, components, aggregates and other material related to Russian or Soviet origin Arms and Defence Equipment was signed during the 20th India-Russia Bilateral Summit held at Vladivostok on 4 January 2019.
The objective of the IGA is to enhance the after-sales support of Russian origin equipment currently in service in the Indian Armed Forces through partnership of Russian OEMs with the Indian industry under the framework of the ‘Make in India’ initiative.
The IGA stipulates assurance of orders for minimum 5 years to manufacturing facilities created under the Agreement, subject to reduction in cost, reduction in time frame of supplies, and ensuring progressive indigenisation of products in India.
The Government has decided to set up one corridor each in Uttar Pradesh and Tamil Nadu. During the Aligarh meet on UP Defence Industrial Corridor held on 11 October 2018, investments of over Rs. 3,700 Crore were announced by the Ordnance Factory Board (OFB), Defence PSUs (DPSUs), and private industries for the Uttar Pradesh Defence corridor.
Similarly, during the launch of Tamil Nadu Defence Industrial Corridor held at Tiruchirappalli on 20 January 2019, an investment of over Rs. 3,100 crore was announced by OFB, DPSUs, and private industries for the Tamil Nadu Defence corridor.
This information was given by Minister of State for Defence Shripad Naik in a written reply to Sanjay Mandlik and others in Lok Sabha on 27 November.
Earlier this week, Naik said that India is exporting helicopters, radars, ammunition and more Defence equipment, while it is also importing equipment from Russia, Israel, UK and USA.
Last week, Naik also revealed that Rs 1,812 crore FDI has been channeled into the Defence sector since 2014.
Visiting Russia earlier in November, Defence Minister Rajnath Singh had urged Russia to jointly manufacture Defence equipment with India. A day after that, Russia announced it would support the ‘Make in India’ initiative with plans to jointly manufacture Kalashnikov AK-203 rifles in India.