Lok Sabha Question No. 5734 (UNSTARRED), answered on 2017-04-07
Subject: Aviation Equipment
Ministry: DEFENCE
Asked by: HARIOM SINGH RATHORE

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

## LOK  SABHA UNSTARRED QUESTION NO.5734

TO BE ANSWERED ON THE 7 TH  APRIL, 2017

## AVIATION  EQUIPMENT

## 5734.  SHRI HARIOM SINGH RATHORE:

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

- (a) whether  the country is self-reliant in the production of aviation equipment;
- (b) if so, the details thereof  and if not, the reasons therefor; and
- (c) the corrective measures taken by the Government in this regard?

## 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. 5734 FOR ANSWER ON 7.4.2017

Hindustan Aeronautics Limited (HAL), a Defence Public Sector Undertaking, over the years has produced more than 4050 aircraft, which include 17 types of aircraft/ helicopters of indigenous design and development, 14 types of  aircraft  /  helicopters  under  transfer  of  technology  from  foreign  Original Equipment Manufacturers (OEMs). HAL has also manufactured over 4900 aeroengines and overhauled / upgraded more than 11,100 aircraft and 32,400 engines. In addition, HAL has manufactured 2,200 types of Line Replaceable Units (LRUs) out of which more than 600 types of LRUs have been indigenously developed for use on various platforms.

HAL has undertaken upgrade of several platforms like AVRO, DORNIER DO-228, MiG-27, JAGUAR and MIRAGE to maintain an operational relevance and fleet serviceability of aircraft/ helicopters for around 20-30 years of exploitation. HAL has provided necessary impetus to the growth of Aviation industry in India. Today, over 2300 vendors are supporting HAL in terms of component manufacturing, tooling and sub-assembly and in design and development.

With  the  steps  as  outlined  above,  HAL  has  been  contributing  in a  significant  way  towards  country's  self-reliance  in  the  production  of  aviation equipment.

Further, to achieve substantive self-reliance in the design, development and production of equipment, weapon systems, platforms required for Defence in as  early  a    time  frame  as  possible,  Government  has  launched  'Make  in  India' initiative.  The  steps  taken  by  the  Government  towards  creating  conditions conducive for the Private industry to take an active role enhancing potential of Small & Medium Enterprises (SMEs) by indigenizing and broadening the Defence R&D base of the country inter-alia include the following:-

- i. A new Defence Procurement Procedure (DPP), 2016 has been promulgated  by  the  Government  to  take  effect  from  01 st April,  2016 whereby a new category of procurement 'Buy {Indian-IDDM (Indigenously  Designed,  Developed  and  Manufactured)}'  which  has been accorded top-most priority  for procurement of Capital equipment. Besides this, preference has been accorded to 'Buy (Indian)' and 'Buy & Make (Indian)' categories of capital acquisition over 'Buy (Global)' and 'Buy  &  Make  (Global)'  categories.  The  'Make'  Procedure  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  :

- ii. FDI  Policy  has  been  revised.  FDI  up  to  49%  is  allowed  through automatic  route  and  beyond  49%  under  Government  approval  route wherever  it  is  likely  to  result  in  excess  to  modern  technology  or  for other reasons to be recorded.
- iii. Indian  licensing  regime  for  Indian  manufacturers  has  been  liberalized and most of the components / parts / sub-systems have been taken out from the list of Defence products requiring industrial license which has resulted in reduction in the entry barriers for new entrants in this sector particularly  SMEs.  The  initial  validity  of  industrial  license  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.
- iv. Issues related to level playing field between  Indian and  foreign manufacturers  and  between  Public  sector  &  Private  sector  have  also been addressed. These include Exchange Rate Variation (ERV) protection for Indian vendors removing anomalies in Customs / Excise duties etc.
- v. Offset guidelines have been made flexible by allowing change of Indian Offset Partners (IOPs) and Offset components even in signed contracts. Foreign Original Equipment Manufacturers (OEMs) are now not required to  indicate  the  details  of  IOPs  and  products  at  the  time  of  signing  of contracts. 'Services' as an avenue of offset have been re-instated.
- vi. The  process  for  export  clearance  has  been  streamlined  and  made transparent and online.

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