Context:

• Haryana government has announced that a Defence and Aerospace Hub will be set up in Mahendragarh under a public-private partnership (PPP) model, which is expected to boost the state’s presence in the defence sector.

Key Points:

• The establishment of a Defence and Aerospace Hub in Mahendragarh marks a significant milestone in Haryana's efforts to enhance its role in the critical defence manufacturing ecosystem.
• This initiative is not merely a regional development but a strategic alignment with India's broader Atmanirbhar Bharat (Self-Reliant India) initiative, which aims to bolster indigenous defence capabilities and reduce reliance on foreign imports.
• The hub is envisioned as a public-private partnership (PPP) model that seeks to leverage the strengths of both sectors to create a robust defence manufacturing environment.

Strategic context of the Defence and Aerospace Hub

• The Mahendragarh hub is part of a national trend towards increasing private sector participation in defence manufacturing, which has gained momentum in recent years. The strategic context of this development can be understood through several key aspects:

Land development:

•  The Haryana government plans to develop a substantial 10,000-acre land bank through the e-Bhoomi portal. This initiative aims to provide the necessary infrastructure for the aerospace and defence ecosystem, facilitating the establishment of manufacturing units, research and development centers, and ancillary industries.

National Defence Policy alignment:

• The hub aligns with the Indian government's vision of enhancing self-reliance in defence production. By fostering a conducive environment for private players, the government aims to create a competitive landscape that encourages innovation and efficiency.

Public-Private Partnership dynamics

The PPP model in defence manufacturing has gained significant traction, reflecting a shift in policy that recognizes the importance of private sector involvement. Key trends include: //

• Increased capital procurement: In the fiscal year 2022-23, 25% of capital procurement, amounting to INR 211.49 billion, was explicitly earmarked for the private sector. This shift underscores the government's commitment to integrating private players into the defence supply chain.//
• Increased capital procurement: In Fiscal Year 2024-25, India has earmarked 75% of its defence capital procurement budget for domestic industry. This represents an increase from 68% in 2022-23. Specifically:

• 75% of the budget (approximately Rs. one lakh crore) is allocated for domestic procurement
• 25% is reserved for the private sector
• The total defence budget for the Ministry of Defence (MoD) is Rs. 6.22 lakh crore for FY 2024-25

• Identification of critical items: The government has identified 18 critical items for industry-led design and development, which include advanced technologies such as hypersonic glide vehicles, lightweight tanks, multi-role helicopters, low-orbit pseudo-satellites, and anti-jamming systems. This focus on cutting-edge technology is crucial for enhancing India's defence capabilities.

Potential impact on Haryana's Defence Ecosystem

The establishment of the Defence and Aerospace Hub in Mahendragarh is expected to have several strategic advantages for Haryana's defence ecosystem:

• Localized manufacturing: The hub will provide a dedicated ecosystem for defence and aerospace manufacturing, reducing logistical challenges and fostering collaboration among various stakeholders.
• Technology transfer: The PPP model facilitates knowledge sharing between public and private entities, enabling the transfer of advanced technologies and best practices.
• Economic growth: The hub is poised to create high-skilled employment opportunities, contributing to the economic development of the region and enhancing the skill set of the local workforce.
• Industrial diversification: By expanding Haryana's industrial capabilities beyond traditional sectors, the hub will contribute to a more diversified and resilient economy.