Rajnath Singh, Union minister of defence, on Wednesday said that 75% of the defence outlay or around ₹1 lakh crore will be spent on procurement from domestic defence manufacturers beginning FY2023-24. He was speaking at the Bandhan ceremony of the 14^th Aero India in Bengaluru.

In the union budget for FY2023-24, the government allocated ₹5.94 lakh crore for the Ministry of Defence, which is 13.18% of the country’s total outlay of ₹45.03 lakh crore. Singh said the decision will strengthen the defence sector and minimise import dependency. “If you take one step, the government promises to take ten steps forward. You spoke of land to run on the path of development. We are providing you full sky. Earmarking three-fourth of the capital procurement budget for the local industry is a step in that direction,” he said.

Launch of iDEX Investor Hub (iIH)

During the event, 266 partnerships were forged including 201 MoUs, 53 major announcements, nine product launches and three Transfers of Technology, worth around ₹80,000 crore. Singh also launched the iDEX Investor Hub (iIH) during the event. As per the ministry of defence, more than ₹200 crores have already been pledged under iIH by leading Indian investors.

“iDEX has helped the development of several home-grown technologies and has provided an important platform to showcase innovations and technological developments. Start-Ups that have developed because of iDEX are also getting orders which have fostered the Start-Up ecosystem in the country. iDEX has also given professionals the opportunity to understand futuristic technologies like Artificial Intelligence, Augmented reality, and Block-chain,” Singh said.

The 14th edition of the biennial Aero India 2023 event -- Asia’s largest aero show started on February 13 this year, in line with the ‘Make in India, Make for the World’ vision and with a significant focus on showcasing indigenous military hardware or technologies, and forging partnerships with foreign companies. The Defence Ministers of 32 countries, Air Chiefs of 29 countries and 73 CEOs of global and Indian OEMs are attending the five-day event.

Defence outlay in Budget 2024

In the budget for FY 2023-24, Defence Revenue expenditure got a 16% higher allocation of ₹2.7 lakh crore and Defence Pension got a 15% higher allocation of ₹1.38 lakh crore. Ministry of Defence (Civil) allocation was also higher by 13% to ₹22,613 crore. The budget has a nominal capital outlay increase of 7% as compared to last year’s increase of 13% and an increase of approximately 19% in the FY22 budget. In the total defence capital expenditure, the army got a share of 23% with ₹37,242 crore, Navy (₹52,805 crore) with a share of 32% and Airforce got a share of 35% (₹57,137 crore). Others (research & development, inspection, technology development, etc got a 10% allocation in defence capex, ₹15,417 crore.

Domestic Defence Manufacturers

75% of defence outlay to be spent for procurement from domestic firms: Rajnath Singh