India aims to procure 75 percent of its defense equipment locally for the next decade 0807131.

Defence & Security News - India

Billionaire Baba Kalyani’s group, which plans a prototype of India’s first privately-built Howitzer gun next year, will be unable to test it as regulations prohibit firms from using military facilities, said Amit Kalyani, executive director at Bharat Forge (BHFC) Ltd., the flagship firm of the group. Mahindra & Mahindra Ltd. (MM)’s proposal for a venture with Rafael Advanced Defense Systems Ltd. was denied by the government, which didn’t give a reason for the rejection.

“This is not rocket science,” Kalyani said in an interview. “We need to just study what other countries have done. There are examples of a strong partnership between the defense establishment and the private industry.”

The world’s largest importer of arms last year may miss its target to boost local supplies as nebulous regulations threaten to derail Kalyani, Larsen & Toubro Ltd. (LT) and Mahindra’s plan to tap the annual 867.4 billion rupee ($14 billion) market. Rules don’t specify the type of weapons companies can build or the restriction on partnerships.

“There is a lot of talk about encouraging private industry in defense,” said Deba Ranjan Mohanty, chairman of Indicia Research & Advisory, a New Delhi-based defense researcher. “When a state decides to open up its defense production, it needs to devise a strategy to see it through. Otherwise, it’ll all be empty talk.”