Indigenisation measure to support Make in India, save $ 400 Mn forex spend annually
As a follow-up to the notification of two Positive Indigenisation Lists of 209 of weapon systems and military equipment, the Ministry of Defence on December 29 announced a related list of 351 imported components which will be procured only from Indian Industry over a three-year timeline.
“This Aatmanirbhar initiative will save foreign exchange approximately equivalent to Rs. 3,000 cr ($ 401.5 Million) every year,” the Ministry of Defence announced in a statement.
Details of these components, sub-systems, assemblies, and sub-assemblies have been notified on the Government’s Srijan portal. (https://srijandefence.gov.in/DPSU%20Indigenization%20List.pdf). These are currently imported by the Defence Public Sector Undertakings (DPSUs).
As part of efforts to reduce dependency on the import of military equipment and promote the Make in India campaign, the Modi Government has taken a number of initiatives, including an increase in the FDI limit in Defence production to 74 percent through the automatic route and 100 percent through the Government approval route under certain conditions.
Separate allocations have been made in the Defence budget for buying indigenously-made military hardware. The Defence Acquisition Procedure is also being increasingly modified to favour Make in India.
Defence Minister Rajnath Singh recently indicated that the Negative Import (or Positive Indigenisation) List will be expanded significantly. “The items in ‘Positive List’ will cross the 1,000-mark in this decade. This is our vision of ‘India Beyond 75’,” the Minister said.
He stressed on efforts to create an ecosystem of defence manufacturing in the country and achieve the ‘Aatmanirbhar Bharat’ (Self-Reliant India) vision of Prime Minister Narendra Modi.
The Indigenisation List for components, sub-systems, assemblies/sub-assemblies also mentions 2,500 formerly imported items that have already been localised.
The order of the Department of Defence Production notifying the list of components to be indigenized in phases over the next three years also calls upon “DPSUs to work in close coordination with industry and supply chain to ensure strict adherence to stipulated timelines”.
It has also been directed that certifications for the indigenized components on the list are to be granted on priority.