Lok Sabha Question No. 1258 (UNSTARRED), answered on 2018-07-25
Subject: Make in India Initiative
Ministry: DEFENCE
Asked by: KIRTI VARDHAN SINGH

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF DEFENCE PRODUCTION

## LOK  SABHA UNSTARRED QUESTION NO.1258

TO BE ANSWERED ON THE 25 TH  JULY, 2018

## MAKE IN INDIA INITIATIVE

1258.  SHRI  KIRTI VARDHAN SINGH:

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

- (a) whether the Government has any plan to promote Defence and Aero manufacturing under Make in India initiative;
- (b) whether there is any proposal from Government of Uttar Pradesh for setting  up of Defence and Aero Manufacturing cluster in UP;
- (c) if  not,  whether  the  Government  proposes  to  plan  such  Defence  and  Aero manufacturing cluster in UP; and
- (d) if so, the details thereof?

## 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) Since  the  launch  of  'Make  in  India'  in  September  2014,  several measures  have  been  taken  by  the  Government  to  promote  indigenous design, development and manufacture of defence & aerospace equipment in  the  country  by  harnessing  the  capabilities  of  the  public  and  private sector. These measures inter alia include:
- i. Defence Procurement Procedure (DPP) has been revised in 2016 wherein specific provisions have been introduced for stimulating growth of the domestic defence industry.
- ii. A  new category of  procurement 'Buy  {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}' has been introduced in DPP-2016  to  promote  indigenous  design  and  development  of defence  equipment. It  has  been accorded top  most  priority  for

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procurement  of  capital  equipment.  Besides  this,  preference  has been  accorded  to  'Buy  (Indian)'  and  'Buy  and  Make  (Indian)' categories of capital acquisition over 'Buy (Global)' & 'Buy & Make (Global)' categories.

- iii. 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.
- iv. 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.
- v. Separate  procedure  for  'Make-II'  sub-category  has  been  notified wherein a number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested Suo-moto  by industry/ individual etc., have been introduced.
- vi. Foreign Direct Investment (FDI) Policy has been revised and under the  revised  policy,  Foreign  Investment  up  to  49%  is  allowed through automatic route and above 49% under Government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.
- vii. Industrial  licensing  regime  for  Indian  manufacturers  under  IDR {Industries  (Development  and  Regulation)}  Act,  1951    has  been liberalised and most of the components/ parts/ sub-systems have been  taken  out  from  the  list of defence  products  requiring Industrial  Licence.    This  has  reduced  entry  barriers  for  new entrants  in  this  sector,  particularly  SMEs.    The  initial  validity  of Industrial Licence  under IDR Act, 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.
- viii. Offset  guidelines  have  been  made flexible by allowing  change of Indian  Offset  Partners  (IOPs)  and  offset  components, even  in

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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 discharge of offset have been re-instated. ix. The process for export clearance has been streamlined and made transparent & online. x. Defence Investor Cell has been created in the Ministry to provide all  necessary information including addressing queries related to investment opportunities, procedures and regulatory requirements for investment in the sector. xi. In order to promote innovation in defence sector, iDEX (Innovations for Defence Excellence)  scheme has been launched by the Government in April 2018. (b) to (d): In  the  Budget Speech of 2018-19, Government has announced setting  up  of  two  Defence  Industrial  Corridors  for  promoting  defence manufacturing under 'Make in India' initiative of the Government. Subsequent to the announcement, Government has decided to set up two Defence Industrial Corridors, out of which one corridor is planned to be set up  in  State  of  Uttar  Pradesh,  spanning  across  Aligarh,  Agra,  Jhansi, Chitrakoot, Kanpur and Lucknow.

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