Public-Private Partnerships (PPPs) and the Road to Self- Reliance in Defence

A Perspective

Abstract

The Industrial Policy Resolution of 1956, under Schedule A, reserved 17 industries including arms and ammunition for the public sector. Accordingly, the defence sector remained solely the domain of defence Public Sector Undertakings (PSUs), Ordnance Factory Board (OFB), and Defence Research and Development Organisation (DRDO) till 2001. However, the country had to resort to the import of ammunition for the Bofors artillery guns during the Kargil War from South Africa, amongst others, even though the country already had a large industrial base consisting of nine defence PSUs, 39 Ordnance Factories (OFs) and 52 laboratories of DRDO. The armed forces stared at the perils of dependence on imports during the war. On a positive note, post the Kargil War, the government decided to open the doors to the defence sector to the private industry. Thus, in May 2001, the government permitted 100 per cent participation by the Indian private sector, subject to licensing, with the aim to galvanise the country's defence industrial base for achieving self-reliance and indigenisation.