Lok Sabha Question No. 3941 (UNSTARRED), answered on 2020-03-18
Subject: Defence Exports
Ministry: DEFENCE
Asked by: Sudhakar Tukaram Shrangre, Vijay Kumar Hansdak, Shardaben Anilbhai Patel

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

## LOK SABHA UNSTARRED QUESTION NO.3941

TO BE ANSWERED ON 18 th  March, 2020

## DEFENCE EXPORTS

3941. SHRI SUDHAKAR TUKARAM SHRANGARE: SHRI VIJAY KUMAR HANSDAK: SHRIMATI SHARDABEN ANILBHAI PATEL:

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

- (a) the current status of annual Indian defence exports as compared to defence export during the last two years vis-a-vis the target fixed;
- (b) whether the Government has set a target to double India's defence export by the year, 2024;
- (c) if so, the details thereof and the measures taken or likely to be taken for getting the target successfully;
- (d) whether the Government proposes to give permission to manufacturers of Defence products to export their product directly without Government involvement and if so, the details thereof; and
- (e) whether the Ordnance Factory Board and Defence PSUs have decided to outsource certain components and if so, the details thereof along with the reasons therefor?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI SHRIPAD NAIK)

रक्षा राज्य मंत्री

( श्री श्रीपाद नाईक )

(a) to (e):  Various reforms/steps have been taken to enhance Defence exports.  These reforms  have  provided  a  big  boost  to  defence  exports  in  the  recent  times.    The authorisation for defence exports in the country have grown seven folds in the last two years.  The steps taken to promote defence exports is at Annexure.

Outsourcing  is used as a strategic tool to achieve cost benefits and helps in complementing the strength of private sector to build a strong industrial base.  It also helps in meeting the delivery schedules and is therefore done by DPSUs and OFB.

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## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (e)  OF  LOK SABHA UNSTARRED QUESTION NO.  3941 FOR ANSWER ON 18.03.2020 REGARDING 'DEFENCE EXPORTS'.

## Measures taken by the Government to promote Defence Exports:

- (i) Special  Chemicals,  Organisms,  Materials,  Equipment  and  Technologies (SCOMET) Category 6 titled 'Munitions List' that was hitherto 'Reserved' has been populated and Military Stores list  notified vide  Notification No. 115(RE-2013)/2009-2014 dated 13 th March, 2015 stands rescinded.
- (ii) The  Director  General  of  Foreign  Trade  (DGFT)  vide  Public  Notice  No. 4/2015-20 dated 24 th April, 2017, notified Department of Defence Production (DDP) as the Licensing Authority for export items in Category 6 of SCOMET.  The export of items specified in Category 6 (Munitions List) except those covered under Notes 2 & 3 of Commodity Identification Note (CIN)  of  the  SCOMET  is  now  governed  by  the  Standard  Operating Procedure issued by the Department  of Defence Production  (DDP), Ministry of Defence.
- (iii) Standard Operating Procedure (SOP) for the export of munitions list items has been modified and placed on the website of the DDP.
- (iv) A  completely end-to-end online portal for receiving and processing authorisation permission has  been developed.  The applications submitted on  this  portal  are  digitally  signed  and  the  authorisation  issued  is  also digitally signed.
- (v) In repeat orders of same product to the same entity, consultation process has been done away with and permission is issued immediately.  For the repeat order of same product to different entity, the consultation earlier done with all stakeholders is now limited only with MEA.
- (vi) In Intra-Company business (which is especially relevant for outsourcing of work by defence related parent company abroad to its subsidiary in India), the  earlier  requirement  of  getting  End  User  Certificate  (EUC)  from  the Government of importing country has been done away with and 'Buying' Company is authorized to issue the EUC.
- (vii) The legitimate export of the parts and components of small arms and body armour for civil use are now being permitted after prior consultation with MEA.
- (viii) For export of items for exhibition purpose, the requirement of consultation with stakeholder has been done way with (except  for select countries).

- (ix) Powers have been delegated to DRDO, DGOF and CMD's of DPSUs for exploring export opportunities and participation in global tenders.
- (x) New  End  User  Certificate  Format  for  Parts  &  Components  has  been provided in SOP.
- (xi) Validity of Export Authorization has been increased for 02 years to date of completion of order/component whichever is later.
- (xii) A  new  provision  for  re-exporting  parts  and  components  for  undertaking repair  or  rework  to  provide  replacement  for  a  component  under  warranty obligation is inserted in the SOP as a sub-classification of repeat orders.
- (xiii) MHA vide Notification dated 1 st November, 2018 has delegated its powers to this Department to issue export license under Arms Rules 2016 in Form X-A, for parts & components of small arms.  With this the Department of Defence  Production  becomes  the  single  point  of  contact  for  exporter  for exports of parts and components of Small Arms & Ammunitions.
- (xiv) The Government has notified the Open General Export License (OGEL)- a one  time  export  license,  which  permits  the  industry  to  export  specified items to specified destinations, enumerated in the OGEL, without seeking export authorisation during the validity of the OGEL.
- (xv) Scheme for Promotion of Defence Exports has been notified to provide an opportunity  to  the  prospective  exporters  an  option  to  get  their  product certified by the Government and provides access to the testing infrastructure of Ministry  of  Defence  for  initial validation of the product  and  its subsequent field trials.  The certificate can be produced by the prospective exporter for marketing their products suitably in the global market.
- (xvi) A separate Cell has been formed in the Department of Defence Production to  co-ordinate  and  follow  up  on  export  related  action  including  enquiries received  from  various  countries  and  facilitate  private  sector  and  public sector companies for export promotion.
- (xvii) A Scheme to provide financial support to Defence Attaches for taking up actions  for  promoting  exports  of  Indian  made  defence  products  both  of public  and  private  sector  in  the  countries  to  which  they  are  attached  has been notified.

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