'Initiatives taken to encourage indigenisation of def sector'
New Delhi: The defence ministry informed the Parliament on Monday that the Centre has taken several policy initiatives in the past few years and brought reforms to encourage indigenous design, development and manufacture of defence equipment.
In a written reply to a question by BJP's Upper House member Anil Agarwal, MoS for Defence Ajay Bhatt mentioned, "Promoting self-reliance in defence manufacturing and technology in the country, initiatives, inter-alia, including priority to the procurement of capital items from domestic sources under defence Acquisition Procedure (DAP) 2020 have been taken."
Further, with the announcement of 18 major defence platforms for industry-led design and development in March 2022, notification was issued of four 'Positive Indigenisation Lists' of a total of 411 items of Services and three 'Positive Indigenisation Lists' of a total of 3,738 items of Defence Public Sector Undertakings(DPSUs), for which there would be an embargo on the import beyond the timelines indicated against them. Also, simplification of industrial licensing processwith longer validity period, liberalisation of Foreign Direct Investment (FDI) policy allowing 74 per cent FDI under automatic route, simplification of making procedure, launch of Mission DefSpace, launch of Innovations for Defence Excellence (iDEX) scheme involving start-ups and MSMEs, implementation of Public Procurement (Preference to Makein India) Order 2017, launch of an indigenisation portal - SRIJAN - to facilitate indigenisation by Indian industries including MSMEs, reforms in offset policy with thrust on attracting investment and transfer of technology for defence manufacturing byassigning higher multipliers, and establishment of two defence industrial corridors — in UP and Tamil Nadu, opening up of defence R&D for industry, start-ups and academia with 25 per cent of defence R&D budget, progressive increase in allocation of defence budget of military modernisation for procurement from domestic sources, have also been announced, the minister added.
"With a focus on indigenisation and procurement from domestic industries, all the major areas of domestic defence production ecosystem such as weapons, ammunition, fighter aircraft, helicopters, missile systems, warships, submarines, armoured vehicles, radars, communication systems, surveillance systems have benefited from the aforesaid initiatives and also given a boost to the growth of domestic industries including MSMEs and start-ups," the MoS defence mentioned in his written reply.
According to the government data, with the actions of the government, the expenditure on defence procurement from foreign sources has reduced from 46 per cent to 36 per cent, thereby reducing the import burden, in the last 3 years (2018-19 to 2020-21). Further, the value of production of public and private sector defence companies has increased from Rs 79,071 cr to Rs 84,643 cr in the last two years - 2019-20 and 2020-21.
