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New Delhi, Dec 21 - With its armed forces expected to ink big-ticket defence deals for combat jets, 155mm howitzers, a variety of helicopters and long-range maritime spy aircraft, India's military hardware imports bill is expected to reach a whopping $30 billion by 2012, a new study says.
The projections have been made in a paper on 'Avenues for Private Sector Participation in Defence' by the industry lobby Associated Chambers of Commerce and Industry of India (ASSOCHAM).
It emphasises that in the past three years, India spent as much as $10.5 billion on military hardware, making it one of the largest arms buyers in the developing world.
The paper says that with ever increasing demand for higher allocation in the defence budget and the limited capacity of the government to meet this demand, the defence sector requires a re-look to procure its goods and services from existing allocations in a more efficient manner.
At Rs.960 billion for fiscal 2007-08, India's military spending amounts to roughly two percent of the country's GDP.
The paper seeks larger private sector participation in all defence related deals and imports, reminding the government that despite the defence ministry's targets of achieving 70 percent self-reliance in defence production 10 years ago, it has fallen short by 40 percent.
Till now, only 30 percent of total defence production has become self-reliant. This is largely because of the limited involvement of the private sector in military manufacturing.
The year 2001 witnessed the first step in this regard as the entry of foreign private players was permitted with 26 percent foreign direct investment being allowed in the sector.
By mid-2007, there were about 5,200 companies supplying around 20-25 percent of components and sub-assemblies to state-owned contractors in the defence sector, said ASSOCHAM president Venugopal N. Dhoot, commenting on the findings of the paper.
India's defence imports could be made cost effective by introducing a competitive bidding process for supplies from the private sector of defence needs, the paper says.
Leading corporate houses like Tatas, Satyam Computers, Mahindras, Kirloskar Bros, L&T and others can make equipment to suit and meet domestic defence requirements, provided the supplies are sought from them by involving their participation through the competitive bidding process, the paper maintains.
The study also recommended outsourcing of many defence activities to the domestic private sector, pointing out that the defence ministry had made some attempts towards this in recent years.
The projections have been made in a paper on 'Avenues for Private Sector Participation in Defence' by the industry lobby Associated Chambers of Commerce and Industry of India (ASSOCHAM).
It emphasises that in the past three years, India spent as much as $10.5 billion on military hardware, making it one of the largest arms buyers in the developing world.
The paper says that with ever increasing demand for higher allocation in the defence budget and the limited capacity of the government to meet this demand, the defence sector requires a re-look to procure its goods and services from existing allocations in a more efficient manner.
At Rs.960 billion for fiscal 2007-08, India's military spending amounts to roughly two percent of the country's GDP.
The paper seeks larger private sector participation in all defence related deals and imports, reminding the government that despite the defence ministry's targets of achieving 70 percent self-reliance in defence production 10 years ago, it has fallen short by 40 percent.
Till now, only 30 percent of total defence production has become self-reliant. This is largely because of the limited involvement of the private sector in military manufacturing.
The year 2001 witnessed the first step in this regard as the entry of foreign private players was permitted with 26 percent foreign direct investment being allowed in the sector.
By mid-2007, there were about 5,200 companies supplying around 20-25 percent of components and sub-assemblies to state-owned contractors in the defence sector, said ASSOCHAM president Venugopal N. Dhoot, commenting on the findings of the paper.
India's defence imports could be made cost effective by introducing a competitive bidding process for supplies from the private sector of defence needs, the paper says.
Leading corporate houses like Tatas, Satyam Computers, Mahindras, Kirloskar Bros, L&T and others can make equipment to suit and meet domestic defence requirements, provided the supplies are sought from them by involving their participation through the competitive bidding process, the paper maintains.
The study also recommended outsourcing of many defence activities to the domestic private sector, pointing out that the defence ministry had made some attempts towards this in recent years.
