Lok Sabha Question No. 2785 (UNSTARRED), answered on 2020-03-11
Subject: Innovative Defence Projects
Ministry: DEFENCE
Asked by: Dr. T. Sumathy (a) Thamizhachi Thangapandian

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

## LOK SABHA UNSTARRED QUESTION NO.2785

TO BE ANSWERED ON 11 th  March, 2020

## INNOVATIVE DEFENCE PROJECTS

2785. DR. T. SUMATHY (a) THAMIZHACHI THANGAPANDIAN:

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

- (a)  whether  the  Government  has  taken  special  measures  to  promote  new  and innovative  defence  production  projects  under  Make  in  India  programme  in  Tamil Nadu and other States;
- (b) if so, the details thereof and the list of projects given approval during the last three years;
- (c)  whether  the  Government  has  taken  note  on  certain  defence  production  projects particularly  manufacturing  of  small  arms  under  the  Make  in  India  programme  not been given approval by the Ordnance Factory Board (OFB);
- (d)  if  so,  the  details  thereof  and  the  list  of  projects  pending  for  approval  in  the  last three years, year-wise; and
- (e) the decision taken by Government and the Ordnance Factory Board in this regard and to expedite the process of approval?
- (a)  to (e):  A statement is attached.

| MINISTER OF STATE IN THE MINISTRY OF DEFENCE   | (SHRI SHRIPAD NAIK)   |
|------------------------------------------------|-----------------------|

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a)  TO  (e)  OF  LOK SABHA UNSTARRED QUESTION NO. 2785 FOR ANSWER ON 11.03.2020 REGARDING 'INNOVATIVE DEFENCE PROJECTS'.

(a)    Government has taken various policy  measures to promote new and innovative defence production projects under the 'Make in India' program:-

- i. A  new  category  of  procurement  'Buy  {Indian-IDDM  (Indigenously Designed,  Developed  and  Manufactured)}'  has  been  introduced  in Defence  Procurement  Procedure  (DPP)-2016  to  promote  indigenous design and development of defence equipment.
- ii. The 'Make' Procedure has been simplified with provision for funding of 90%  of  development  cost  by  the  Government  to  Indian  industry  and reserving Government funded Make-I projects not exceeding development cost of Rs.10 Crore & procurement cost Rs.50 Crore per year for MSMEs.  The Industry funded Make-II Projects not exceeding development cost of Rs.3 Crore and procurement cost of Rs.50 Crores per year have also been reserved for MSMEs.
- iii. A  Separate  procedure  for  'Make-II'  category  has  been  notified  to encourage indigenous development and manufacture of defence equipment including provisions such as relaxation of eligibility criterion,  minimal  documentation,  provision  for  considering  proposals suggested by industry/individual etc.
- iv. 'Innovations  for  Defence  Excellence  (iDEX)'  was  launched  in  April, 2018  to  create  an  ecosystem  to  foster  innovation  and  technology development in Defence and Aerospace by engaging Industries including MSMEs,        Start-ups, Individual Innovators, R&D institutes and academia including grants/fund.
- v. The 'Strategic  Partnership (SP)' Model which envisages establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, enabling tie up with global Original Equipment  Manufacturers  (OEMs)  for  technology  transfers  to  set  up domestic manufacturing infrastructure and supply chains was notified.

- vi. FDI Policy has been revised to allow  FDI under automatic route upto 49% and beyond 49% through Government route approval for technology acquisition etc.
- vii. A 'Policy for indigenization of components and spares used in Defence Platforms'  was  notified  in  March,  2019  to  support  indigenization  of imported components (including alloys & special materials).
- viii. Defence Products list requiring Industrial Licences was rationalised and initial  validity  of  the  Industrial  Licence  granted  under  the  IDR  Act increased from 03 years to 15 years with a provision of extension by 03 years.
- ix. 127  items  were  notified  under  Public  Procurement  Order  2017  of Department  for  Promotion  of  Industry  and  Internal  Trade  (DPIIT) whereby Defence PSUs/OFB give preference to domestic manufacturers in procurement.
- x. Government  announced  two  defence  industrial  corridors  to  promote defence  industrial  base  in  the  country  Tamil  Nadu  and  Uttar  Pradesh (UP).

(b)  In the last three financial years i.e. from 2016-17 to 2018-19 and current year upto December, 2019, Government has accorded Acceptance of Necessity (AoN) to 138 proposals worth  Rs.2,69,465  Crore  approximately  under  'Buy  (Indian-IDDM)', 'Buy  (Indian)',  'Buy  and  Make  (Indian)',  'Buy  &  Make',  'Strategic  Partnership Model'  or  'Make'  categories  of  capital  procurement  which  promotes  domestic manufacturing as per Defence Procurement Procedure (DPP)- 2016.

(c) to (e):  No project proposal for manufacturing of Small Arms under the 'Make in India' program is pending approval by Ordnance Factory Board.

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