India’s Defence Production
Building a Stronger Nation
The Indian defence manufacturing industry is a significant sector for the security of the nation. India has been ranked among the top importers of defence equipment and the Government has taken several policy initiatives to promote self-reliance in defence manufacturing.
It is worth noting that many important defence equipments have been produced in the country. These projects include 155 mm Artillery Gun system ‘Dhanush’, Bridge Laying Tank, Light Combat Aircraft ‘Tejas’, ‘Akash’ Surface to Air Missile system, Submarine ‘INS Kalvari’, Inshore Patrol Vessel, Offshore Surveillance Ship, ‘INS Chennai’ and Anti-Submarine Warfare Corvette.
Now, Let’s get to know about the major policy initiatives and reforms.
The Government has revised Defence Procurement Procedure 2016 as Defence Acquisition Procedure (DAP)- 2020. The move has been driven by the tenets of Defence Reforms announced as a part of ‘Aatmanirbhar Bharat Abhiyan’.
To promote indigenous design and development of defence equipment, the ‘Buy Indian Indigenously Designed, Developed and Manufactured’ category has been accorded the topmost priority for procurement of capital equipment. The Ministry of Defence has also notified two ‘Positive indigenisation lists’ of 209 items which would offer a great opportunity to the Indian defence industry. This will help in manufacturing listed items using the design and development capabilities to meet the requirements of the Indian Armed Forces.
Moreover, the ‘Make’ procedure of capital procurement has been simplified and there is also a provision for funding up to 70% of development cost by the Government to Indian industry under the Make-I category. In addition, there are specific reservations for MSMEs under the ‘Make’ procedure.
Moreover, to encourage the manufacturing of defence equipment, the procedure for the ‘Make-II’ category has been introduced in Defence Procurement Procedure -2016 along with industry-friendly provisions such as relaxation of eligibility criterion, minimal documentation and provision for considering proposals suggested by industry or individual. So far, 58 projects relating to Army, Navy & Air Force, have been accorded ‘Approval in Principle.
Moreover, the Government has also enhanced FDI in the Defence Sector up to 74% through the Automatic Route and up to 100% by Government Route.
An innovation ecosystem for Defence titled Innovations for Defence Excellence (iDEX) has also been launched in April 2018. iDEX is aimed at creating an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging different industries. These industries include MSMEs, startups, Individual Innovators, R&D institutes and are also provided with grants/funding to carry out R&D which has potential for future adoption for Indian defence and aerospace needs. To provide development support to these startups, an indigenization portal named SRIJAN has been launched in August 2020 for Defence Public Sector Undertakings/Ordnance Factory Board/ Services.
Apart from this, two Defence Industrial Corridors have also been established incurring investments of Rs 20,000 crores in Defence corridors of Uttar Pradesh and Tamil Nadu by the year 2024. So far, investment of approx. Rs 3342 crores have been made in both the corridors by public as well private sector companies.
These policy initiatives are aimed at encouraging indigenous design, development and manufacture of defence equipment in the country, thereby reducing dependency on imports in the long run and boosting India’s defence sector.