Lok Sabha Question No. 3182 (UNSTARRED), answered on 2018-03-14
Subject: Modernisation of Defence
Ministry: DEFENCE
Asked by: N.K. PREMACHANDRAN

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE

## LOK  SABHA

## UNSTARRED QUESTION NO.3182

TO BE ANSWERED ON THE 14 TH  MARCH, 2018

## MODERNISATION OF DEFENCE

3182.  SHRI N.K. PREMACHANDRAN:

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) the  details  of  the  action  taken by  the  Government  for  modernisation  of  defence sector;
- (b) the details of the action taken to strengthen the security system of the country;
- (c) the details of the action taken by the Government to strengthen the Defence and Civil relationship;
- (d) whether the Government proposes to strengthen the Defence Industry to meet the requirement of Defence sector; and
- (e) if  so,  the  details  thereof  and  the  details of  the  action taken  /  being  taken in  this regard?

## A    N    S    W    E    R

MINISTER OF STATE

IN THE MINISTRY OF DEFENCE

र  ा रा य मं ी

(a) to (e): A statement is attached.

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(DR. SUBHASH BHAMRE)

(डा. सुभाष भामरे)

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA UNSTARRED QUESTION NO. 3182 FOR ANSWER ON 14.3.2018

(a) & (b): Modernisation of defence sector is a continuous process and is undertaken based on threat perception, operational challenges, technological changes and available resources. The process of defence acquisition is based on the fifteen years Long Term Integrated Perspective Plan (LTIPP), five years Services  Capital  Acquisition  Plan  (SCAP)  and  an  Annual  Acquisition  Plan (AAP). Government  also constantly reviews the security scenario and accordingly  decides  to  induct  appropriate  defence  equipment  to  keep  the Armed Forces in  a state of readiness.

The Government of India remains continuously vigilant and is firm in its resolve  to  take  all  necessary  steps  to  effectively  safeguard  India's  security and territorial integrity.

- (c) Apart  from  the  main  responsibility  of  defending  the  borders  of  the country, the Armed Forces render timely assistance to civil authorities for the maintenance of law and order and / or essential services as also in rescue and relief operations during natural calamities. Specific details of action taken in this  regard  are  included  in  chapter-12  of  the  Annual  Reports  regarding 'Cooperation between Armed Forces and Civil Authorities' of the Ministry of Defence, which are available on the website of the Ministry (mod.nic.in).

(d) & (e): The Government is pursuing several initiatives to strengthen the defence industry as per details, given below:-

- Defence  Procurement  Procedure  (DPP)  has  been  revised  in  2016 wherein specific provisions  have  been introduced for stimulating growth of the domestic defence industry.
- A  new  category of procurement 'Buy [Indian-IDMM (Indigenously Designed, Developed and Manufactured)]' has been introduced in DPP2016  to  promote  indigenous  design  and  development  of  defence equipment.
- Government has notified  the  'Strategic  Partnership  (SP)'  Model  which envisages establishment of long-term strategic partnerships with Indian entities  through  a  transparent  and  competitive  process,  wherein  they would  tie  up  with  global  Original  Equipment  Manufacturers  (OEMs)  to seek technology transfers to set up domestic manufacturing infrastructure and supply chain.
- The 'Make' Procedures has been simplified with provisions for funding of 90% of development cost by the Government to Indian Industry and reserving  projects  not  exceeding  development  cost  of  Rs.  10  crore (Government funded) and Rs. 3 crore (Industry funded) for MSMEs.

:  2  :

- The 'Make' Procedures has been simplified with provisions for funding of 90% of development cost by the Government to Indian Industry and reserving  projects  not  exceeding  development  cost  of  Rs.  10  crore (Government funded) and Rs. 3 crore (Industry funded) for MSMEs.
- Separate procedure for 'Make-II' sub-category has been notified wherein a number of industry friendly provisions such as relaxation of eligibility criterion,  minimal  documentation,  provision  for  considering  proposals suggested by industry / individual etc., have been introduced.
- Defence  Investor  Cell  has  been  created  in  the  Ministry  to  provide  all necessary information including addressing queries related to investment  opportunities,  procedure  and  regulatory  requirements  for investment in the sector.
- FDI Policy has been revised and under the revised policy, FDI is allowed under automatic route upto 49% and beyond 49% through Government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.
- The Defence  Products  List for the  purpose of issuing Industrial Licenses  (ILs)  under  IDR  Act  has  been  revised  and  most  of  the components,  parts,  sub-systems,  testing  equipment  and  production equipment have been removed from the list, so as to reduce the entry barriers for the industry particularly small & medium segment.
- The  initial  validity of  the  Industrial  Licence  granted  under  the  IDR  Act has been increased from 3 years to 15 years with a provision to further extend it by 3 years on a case-to-case basis.
- Offset guidelines have been made flexible by allowing change of Indian Offset Partners (IOPs) and offset components, even in signed contracts.
- To promote the participation of private sector, Outsourcing and Vendor Development Guidelines for DPSUs and OFB have been issued.
- The Government has set up the Technology Development Fund (TDF), which  aims  at  funding  the  development  of  defence  and  dual  use technologies that are currently not available in the defence industries.
- In  addition,  Technology  Perspective  and  Capability  Roadmap  (TPCR), which gives out the details of the equipment and technologies, required by the Armed Forces, has been put in the public domain to provide the Indian Defence Industry an overview of the direction in which the Armed Forces intend to seek specific capability in the long run.
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