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Nitin Mangal, a SEBI-registered research analyst, has ignited a debate on social media platform X, alleging that some companies are exploiting loopholes in the ‘Make in India’ program for defense procurement.

Mangal argues that the current system allows companies to qualify for ‘Make in India’ benefits even if they simply purchase components from an Indian company, regardless of whether those components are actually manufactured domestically. In his example, company A, which doesn’t manufacture itself, could buy parts from company B, which imports them. Under current rules, this might allow company A to qualify for the program.

Mangal further suggests that companies might be forming cartels to exploit this loophole. He warns that any regulatory crackdown on such practices could significantly impact the revenue of these defense companies.

The analyst’s statement calls for a closer look at the current qualification process for ‘Make in India’ defense contracts. Stricter regulations and enforcement mechanisms might be necessary to ensure the program achieves its intended goals.

Ultimately, ensuring a strong domestic defense manufacturing base is crucial for India’s national security. Relying on imported components could create vulnerabilities in the supply chain.