Lok Sabha Question No. 2836 (UNSTARRED), answered on 2020-03-11
Subject: Status of ‘Make in India’ Initiative
Ministry: DEFENCE
Asked by: Rajyavardhan Singh Rathore

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

## LOK SABHA UNSTARRED QUESTION NO.2836

TO BE ANSWERED ON 11 th  March, 2020

## STATUS OF 'MAKE IN INDIA' INITIATIVE

2836. COL. RAJYAVARDHAN RATHORE:

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

- (a) the number and the details of programmes year-wise since 'Make' category was introduced which are being developed under 'Make' category for all the three Armed Forces;
- (b) the status of programmes under 'Make' category and the reasons, if any, for the delay/foreclosure and whether such delays/foreclosure are affecting the capability of the Indian Armed Forces;
- (c)  if  so,  the  details  thereof  and  the  net  centric  capability  of  Indian  Army  and  the reasons for the forward looking 'Make' programme Battlefield Management Systems been foreclosed;
- (d) the steps being taken to overcome existing capability gaps due to delays/foreclosure; and
- (e) whether there is any programme in the future which will allow Indian Army to be at par with other Armies in terms of its net centric capability?

## 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):  A statement is attached.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a)  TO  (e)  OF  LOK SABHA UNSTARRED QUESTION NO. 2836 FOR ANSWER ON 11.03.2020 REGARDING 'STATUS OF 'MAKE IN INDIA' INITIATIVE'.

(i)  The  Capital  Procurement  of  defence  equipment  is  undertaken  based  on  threat perception, operational challenges and technological changes and to keep the Armed Forces in a state of readiness to meet the entire spectrum of security challenges. While doing  so,  attempt  is  made  at  achieving  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  and  creating  conditions  conducive  for private industry to play an active role in this endeavour and enhancing the potential of SMEs  in  indigenisation  and  broadening  the  defence  R&D  base  in  the  country.  A number  of  measures  have  been  taken  to  promote  'Make  in  India'  in  defence manufacturing by harnessing the capabilities of the public and private sectors such as introduction  of  new  category  of  procurement  'Buy  {Indian-IDDM  (Indigenously, Designed,  Developed  and  Manufactured}  and  'Strategic  Partnership  Model'  in Defence  Procurement  Procedure  (DPP);  according  preference  to  'Buy  (IndianIDDM)',  'Buy  (Indian)',  'Buy  &  Make  (Indian)'  &  'Make'  categories  of  capital acquisition over 'Buy (Global)' & 'Buy & Make (Global)' categories, simplification of Make-II procedure, etc. As a result of the aforesaid initiatives, the Government in the  last  three  years  i.e.  from  2016-17  to  2018-19  and  till  December,  2019,  has accorded  Acceptance  of  Necessity  (AoN)  to  138  proposals  worth  Rs.  2,69,465.26 crore  approximately,  under  these  categories  of  Capital  Procurement  which  promote domestic manufacturing as per DPP-2016.

(ii) The 'Make' procedure seeks to address the multiple objectives of self-reliance, wider participation of Indian Industry, impetus for MSME sector, sound implementation, transparent execution and timely induction of equipment into Indian Armed Forces. The 'Make' category, is further sub divided into the following:-

(1) ' Make-I' (Government Funded) - Projects under Make-I sub category have been simplified with provisions for funding of 90% of development cost by the Government to Indian Industry and reserving Government funded MakeI projects not exceeding development cost of Rs. 10 crore and procurement cost of Rs. 50 crore per year for MSMEs.

(2) 'Make-II'  (Industry  Funded)  A  new  separate  'Make-II  (Industry Funded)'  procedure  was  notified  by  the  Government  in  February,  2018,  to primarily  focus  upon  development  of  equipment/  system/  platform  or  their upgrades  or  their  subsystems/  sub-assembly/  assemblies/  components  and import substitution. Under this procedure, no Government funding is envisaged for  prototype  development  purposes  but  there  is  an  assurance  of  orders  on successful  prototype  development.  This  procedure  has  number  of  industry friendly provisions such as relaxation of eligibility criterion, minimal documentation,  reduced  timelines,  provision  for  consideration  of  Suo-moto proposals  by  industry/individuals,  etc.  Out  of  44  projects  which  have  been accorded  AIP,  13  projects  have  been  accorded  'Acceptance  of  Necessity (AoN)' and 'Project Sanction Order (PSO)' has been issued for 09 Projects.

(iii)  The Defence Procurement Procedure stipulates a time schedule for completion of the development & procurement cycle of Make Procedure. However, the time taken to undertake  capital  procurement  of  defence  equipment  depends  on  the  nature  and complexity  of  the  equipment  being  developed  involving  rigorous  trials,  after  which detailed  bid  evaluations  and  comprehensive  commercial  negotiations  have  to  be undertaken.  Nonetheless,  under  the  Defence  Procurement  Procedure  (DPP)-2016, Government has laid down further provisions for ensuring swift decision making and simplification of the processes.

(iv) Due  to  strategic  consideration,  specific  details  of  individual  projects  is  not being disclosed.

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