Lok Sabha Question No. 4363 (UNSTARRED), answered on 2018-03-21
Subject: Defence Manufacturing
Ministry: DEFENCE
Asked by: SHIVAJI ADHALRAO PATIL, ANANDRAO  ADSUL, Shrirang Appa Barne, VINAYAK BHAURAO RAUT

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

## LOK  SABHA UNSTARRED QUESTION NO.4363

TO BE ANSWERED ON THE 21 ST  MARCH, 2018

## DEFENCE  MANUFACTURING

4363.  SHRI  ADHALRAO PATIL SHIVAJIRAO:

SHRI ANANDRAO ADSUL:

SHRI  SHRIRANG  APPA  BARNE:

SHRI VINAYAK BHAURAO RAUT:

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

- (a) whether despite the Government's good intentions, domestic defence manufacturing has not taken off in a big way and if so, the details thereof and the reasons therefor;
- (b) whether lack of a long-term defence procurement plan and ill-advised conditions such  as  technology  transfer  in  a    stipulated  time  frame  has  hampered  defence  sector development and if so, the details thereof;
- (c) whether the defence ministry is increasingly  falling short of the funds and if so, the details thereof;
- (d) whether various State Governments have submitted proposal for defence industrial corridor project in their States and if so, the details thereof and the action taken by the Government thereto;
- (e) whether the Government need a coherent defence manufacturing policy to achieve the objectives and boost the domestic defence manufacturing; and
- (f) if so, the details thereof and the steps taken / being taken in this regard?

## A    N    S    W    E    R

MINISTER OF STATE

IN THE MINISTRY OF DEFENCE

र  ा रा य मं ी

(डा. सुभाष भामरे)

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

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(DR. SUBHASH BHAMRE)

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  to  (f)  OF  LOK  SABHA UNSTARRED QUESTION NO. 4363 FOR ANSWER ON 21.3.2018

(a) No, Madam.  The domestic defence manufacturing in the country stands on a  strong  footing,  and  in  the  year  2016-17,  the  total  defence  production  in  the country was worth Rs.61,500 crore approximately.

(b) Does not arise  since  the  Government  is pursuing  achievement  of higher level  of  indigenisation  and  self  reliance  in  defence  sector  through  measures including  according  preference  to  procurement  from  Indian  vendors  under  the Defence Procurement Procedure (DPP), simplification of Make procedure, introduction of simplified procedure for Make-II sub-category, liberalization of the licensing regime and Foreign Direct Investment (FDI) policy by raising the cap on FDI  in  the  defence  sector,  simplification  of  export  procedure,  streamlining  of defence  offset  guidelines  etc.    Recently,  the  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 chains.

(c) During the last three financial years and current year (upto 31.01.2018), 121 contracts  have  been  signed  with  Indian  vendors  and  71  contracts  have  been signed  with  foreign  vendors  for  capital  procurement  of  Defence  equipment  for Armed Forces.  The Capital Budget and Expenditure for Armed Forces for the last three years are given below:-

(Rs. in Crore)

| Year    |   Revised Estimates |   Expenditure |
|---------|---------------------|---------------|
| 2014-15 |             66151.7 |       65862.4 |
| 2015-16 |             65400   |       62235.5 |
| 2016-17 |             62619.4 |       69280.2 |

is

(d) The strengthening of defence-industrial base of the country a  continuous process and is undertaken by the Government periodically based on  the  requirements,  viability,  availability  of  resources  etc.    Consequent  to  the announcement of  setting  up  of  two  Defence  Industrial  Corridors  in  the  Budget Speech of 2018-19, Government has received three proposals from the states of Uttar Pradesh, Tamil Nadu and Telangana. Among  these three states, Government has decided to set up two Defence Industrial Corridors, one in the state  of  Tamil  Nadu  and  the  other  in  the  state  of  Uttar  Pradesh.    These  are spanning across Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli in Tamil Nadu and spanning across Aligarh, Agra, Jhansi, Kanpur and Lucknow in Uttar Pradesh (UP).

(e) & (f): The  Government  has  recently  announced  in  the  General  Budget 2018-19 that the Government  will bring out an industry friendly  Defence Production Policy 2018 to promote domestic production by public sector, private sector and MSMEs.

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