The government should encourage private players in defence R&D and also fund 80 per cent of the research and development activities to emerge as a significant player in the global defence market, a study said. Since defence research, design and development is fraught with risks, the private sector is unlikely to come forward, the joint study of Assocham and Ernst and Young said.
If India wishes to emerge as a significant player in the global market, it would have to fund export driven products and make export variants of high end systems, it said. "Therefore, there is a need for a policy as per which 80 per cent of Indias R&D is funded from government resources, effectively encouraging the private sector to undertake risks associated with developing defence products," it said.
While the Defence Research Development Organisation (DRDO) could focus on basic research related to strategic defence equipment, the private sector should be engaged in defence R&D especially in products design and development, it said. The study further said in order to increase defence exports, there is a need to make the Indian domestic defence industry competitive enough to sustain Indian defence industrys demands and also meet exports orders.
India spends about Rs 4,500 crore annually on defence R&D. A government study on DRDO conducted by P Rama Rao had in its report last year recommended that the defence research agency should focus on its core competence and give room to the private sector to take up defence research.