Lok Sabha Question No. 2774 (UNSTARRED), answered on 2016-12-02
Subject: Delivering of Modern Defence Hardware
Ministry: DEFENCE
Asked by: R. PARTHIPAN

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE PRODUCTION

## LOK  SABHA UNSTARRED QUESTION NO.2774

TO BE ANSWERED ON THE 2 ND  DECEMBER, 2016

## DELIVERING OF MODERN DEFENCE HARDWARE

2774.  SHRI  R. PARTHIPAN:

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

- (a) whether the country's defence industry suffers from major policy, structural and cultural  challenges  which  is  hampering  the  delivering  of  modern  defence  hardware  / equipment to defence forces;
- (b) if so, the details thereof; and
- (c) the corrective measures taken by the Government to tackle the issue?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(DR. SUBHASH BHAMRE)

र  ा रा य मं ी

(डा. सुभाष भामरे)

(a) to (c): A Statement is attached.

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## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (c)  OF  LOK SABHA UNSTARRED QUESTION NO. 2774 FOR ANSWER ON 2.12.2016

1. The requirements of defence equipment for the Indian Armed Forces are met through both indigenous production and imports.  The expenditure on  purchase  of  defence  equipment  for  the  three  services  in  the  last  two years  and  current  financial  year,  from  the  Foreign  vendors  and  Indian vendors is as given below:-

(Rs. in crore)

|                             |   Total Procurement |   Procurement from Foreign Vendors |   Procurement from Indian Vendors |
|-----------------------------|---------------------|------------------------------------|-----------------------------------|
| 2014-15                     |             77986.3 |                           29159.7  |                           48826.6 |
| 2015-16                     |             76178.8 |                           26190.5  |                           49988.3 |
| 2016-17 (upto October 2016) |             32073.2 |                            9278.26 |                           22794.9 |

2. During  the  last  two  financial  years  (2014-15  and 2015-16),  108 contracts  with  total  value  of  Rs.1,12,736.81  crore  have  been  signed  for capital  procurement  of  defence  equipment,  out  of  which  73  contracts involving  a  value  of  Rs.72,303.34  crore  were  signed  with  Indian  vendors. During 2014-15 and 2015-16, the Defence Acquisition Council has accorded Acceptance of Necessity (AON) to 114 capital procurement cases, of which 85  cases  involving  Rs.1,60,362  crore  are  under  the  'Buy  (Indian)'  'Buy  & Make (Indian)' and 'Buy & Make' categories. 3. A number of measures have been adopted to achieve self-sufficiency in  defence  production  by  harnessing  the  capabilities  of  the  public  and private sector.  These measures include according priority and preference to  procurement  from  Indian  vendors  under  the  Defence  Procurement Procedure (DPP) 2016, liberalization of the licensing regime and providing access to modern technology to Indian industry by raising the cap on FDI in the defence sector. 4. promulgated  for  capital  procurements  and  has  come  into  effect  from  1 st

- The  new  Defence  Procurement  Procedure  (DPP)  2016  has  been April 2016.  DPP 2016 has a focus on achieving the 'Make in India' vision by  according  topmost  priority  to  'Buy  Indian  -  IDDM  (Indian  Designed, Developed and Manufactured) and 'Buy (Indian)' categories. It also focuses on  enhancement  and  rationalization  of  indigenous  content.    The  'Make' Procedure has been simplified with provisions for earmarking projects not exceeding development cost of Rs.10 crores (government funded) and Rs.3 crores  (industry  funded)  for  MSMEs;  and  with  provisions  for  involving private industry as production agencies and technology transfer partners.
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