Chennai: Government plans to meet 70 per cent of the country's total Defence requirements from Indian Industry both private and public, Minister of State for Defence O Rajagopal said on October 16.

"This target is to be achieved by 2005 for strategic reasons," he said while inaugurating a CII (Confederation of Indian Industry) organised seminar on Defence-Industry partnership in Chennai.

He said a significant portion of the Defence budget was spent on procuring equipment for Armed Forces adding about Rs 12,000 crore to Rs 13,000 crore is spent on procuring items from ordnance factories and Defence undertakings at present. The import of items is approximately of a value of over Rs 10,000 crore, he added.

He said outsourcing of Defence requirements should continue to increase giving greater responsibility to the private sector.

"Ideally speaking, the large Defence PSUs (Public Sector Undertakings) and ordnance factories should be mainly involved in production of critical items and integration of large systems leaving a significant quantity and variety to be procured from the private sector through outsourcing," he said.

At present, the level of outsourcing by ordnance factories and Defence PSUs ranges from 20 to 40 per cent benefiting mainly small industries, he said.

Rajagopal said ever since the private sector was opened for Defence production the government issued 13 letters of intent (LoI) to those who applied for licences for manufacturing Defence items.

"We in India have a very vibrant and extensive infrastructure in the private sector, which has not been fully exploited", he said, adding this vast reservoir of talent and resources, would certainly enable the development of a strong national Defence industry.

The main objective of opening Defence production to the private sector was to pool capital, manpower resources and available industrial infrastructure within the country to achieve the goal of greater self- reliance in Defence production.

Government was fully aware of the fact that the private sector needed to be encouraged but at the same time would also like to see the development of existing public sector adding the need of the hour was a healthy co-existence between the private and public sector.

Alok Perti, Joint Secretary, supplies, Ministry of Defence, also emphasised the need for greater outsourcing in Defence production.

PTI