Dip in defence imports will be economically fruitful: Modi

Prime Minister Narendra Modi Wednesday said reducing imports of defence equipments will reap rich economic benefits.

"A nation with a strong defence industry will not only be more secure. It will also reap rich economic benefits," said Modi at the 10th edition of the Aero India 2015, a trade fair for defence equipment here.

He said the event can be a platform to launch India's defence manufacturing sector.

"It can boost investment, expand manufacturing, support enterprise, raise the technology level and increase economic growth in the country," Modi said.

He said the defence industry in the government sector alone employ nearly 200,000 workers and thousands of engineers and scientists.

Modi said the workforce not only produces an output of nearly $7 billion annually, but also supports a very large pool of small and medium enterprises.

He said the defence industry in the private sector is still small and that it employs thousands of people even though nearly 60 percent of our defence equipment is imported.

Calling for reducing the imports of defence equipment, Modi said we are spending tens of billions of dollars on acquisitions from abroad.

"There are studies that show that even a 20 to 25 percent reduction in imports could directly create an additional 100,000 to 120,000 highly skilled jobs in India.

"If we could raise the percentage of domestic procurement from 40 to 70 percent in the next five years, we would double the output in our defence industry," Modi said.

"This is why it is at the heart of our Make in India programme," he added.

The prime minister said: "We have raised the permitted level of Foreign Direct Investment to 49 percent. This can go higher, if the project brings state-of-the art technology. We have permitted investments up to 24 percent by Foreign Institutional Investments. And, there is no longer a need to have a single Indian investor with at least a 51 percent stake."