DIPP for domestic production of tanks, armoured vehicles
The four groups of items that have been included in the ‘negative list’ are tanks and other armoured fighting vehicles; defence aircraft, space craft and parts thereof; warships of all kinds;/ and arms and ammunitions and allied items of defence equipment; parts and accessories.
Thus a wide swathe of materiel have been left out like subsystems of major weapons systems and items that have been named ‘dual use’ have been left out of the purview of Industrial (development and regulation) Act, 19fifty1.
Federation of Indian Chamber of Commerce and Industries has welcomed the move for it says, that
it has helped Indian defence industries and a large number of medium, small and micro enterprises (MSMEs), ‘in synchronising with global supply chains of OEMs.’ This is expected to boost the sector in the near and long term.
But keen observers of the budding defence industrial sector in India say that this does not directly open up the sector to foreign direct investment (FDI), let’s say. A Distinguished Fellow of the Institute of Defence Studies and Analyses, Atul Cowsish, says, ‘For that to happen, the FDI policy of the government needs to be changed in line with the DIPP relaxations.’
Consequent to this change the government will also have to take a policy decision about boosting exports of defence materials. Cowshish, who is also a former Indian Defence Accounts Service officer, says that earlier there used to be an Indian Foreign Service officer who used to man this division at the joint secretary level; now there are not any, for the country does not have an aggressive arms export policy really.