The Prime Minister Narendra Modi while inaugurating air show, 'Aero India' said, India has the reputation as the largest importer of defence equipment in the world.

"We do need to increase our defence preparedness. We do have to modernize our defence forces," Modi added.

He further said, our country's security challenges are well known and international responsibilities are evident.
As a nation of one billion people, we also have huge requirements for managing internal security, Modi opined.

In India, the defence industry in the government sector alone employs nearly 200,000 workers and thousands of engineers and scientists. They produce an output of nearly 7 billion dollars annually. It also supports a very large pool of small and medium enterprises.

He further said, "Our defence industry in private sector is still small. But, it already employs thousands of people. This is despite the fact that nearly 60% of our defence equipment continues to be imported."

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

"We are reforming our defence procurement policies and procedures. There would be a clear preference for equipment manufactured in India," the Prime Minister said.

Offsets system is a crucial instrument to develop and upgrade our defence industry, Modi further said.

"We have introduced significant reforms in our offsets policy. I am acutely aware that it still needs a lot of improvements. We will pursue them in consultation with domestic industry and our foreign partners."

"I want our offsets policy not as a means to export low-end products, but to acquire state-of-the art technology and skills in core areas of priority."

Government's support for research and development is essential for defence sector. And, it should also be accompanied by a degree of assurance on purchase, he added.

"More broadly, our defence industry will succeed more if we can transform the manufacturing sector in India."

Defence budgets around the world are becoming tighter. India's frugal but sophisticated manufacturing and engineering services sectors can help reduce costs.

India can also be a base for export to third countries, especially because of India's growing defence partnerships in Asia and beyond, he opined.

"A strong Indian defence industry will not only make India more secure. It will also make India more prosperous," Modi added.