Lok Sabha Question No. 3703 (UNSTARRED), answered on 2022-03-25
Subject: Manufacturing of ultra-modern Defence Equipment
Ministry: DEFENCE
Asked by: Ramcharan Bohra

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF DEFENCE PRODUCTION

## LOK SABHA

## UNSTARRED QUESTION NO. 3703

TO BE ANSWERED ON 25 TH  MARCH, 2022

## MANUFACTURING OF ULTRA-MODERN DEFENCE EQUIPMENT

## 3703. SHRI RAMCHARAN BOHRA:

Will the Minister of Defence be pleased to state:

- (a) the details of policy related to manufacturing of ultra- modern defence equipment;
- (b) whether the Government has entered into any strategic defence deal/agreement with private companies for manufacturing of defence equipment in the country;
- (c) if so, the details thereof; and
- (d)  the  steps  taken  by  the  Government  for  transfer  of  ultra-modern  defence  technology  from foreign countries to India?

## A  N  S  W  E  R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

(a):    The Government has taken several policy initiatives in the past few years and brought in reforms to encourage indigenous design, development and manufacture of defence equipment in the  country.    These  initiatives,  inter-alia,  include  according  priority  to  procurement  of  capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020; Announcement of  18  major  defence  platforms  for  industry  led  design  &  development;  Notification  of  two 'Positive  Indigenisation  Lists'  of  total  209  items  of  Services  and  one  'Positive  Indigenisation List' of total 2851 items of Defence Public Sector Undertakings (DPSUs), for which there would be  an  embargo  on  the  import  beyond  the  timelines  indicated  against  them;  Simplification  of Industrial  licensing  process  with  longer  validity  period;  Liberalisation  of  Foreign  Direct Investment  (FDI)  policy  allowing  74%  FDI  under  automatic  route;  Simplification  of  Make Procedure; Launch of Innovations for Defence Excellence (iDEX) scheme involving startups & Micro, Small and Medium Enterprises (MSMEs); Implementation of Public Procurement

(Preference to Make in India) Order 2017; Launch of an indigenisation portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs; and Reforms in Offset policy with thrust  on  attracting  investment  and  Transfer  of  Technology  for  Defence  manufacturing  by assigning higher multipliers.

(b) & (c):  Capital procurement of defence equipment are undertaken from various domestic as well  as  foreign  vendors,  based  on  threat  perception,  operational  challenges  and  technological changes and to keep the Armed Forces in a state of readiness.  During the last three financial years  (2018-19  to  2020-21)  and  current  financial  year 2021-22  (upto  February,  2022),  out  of total  197  capital  acquisition  contracts  signed,  127  contracts  have  been  signed  with  Indian vendors for capital procurement of defence equipment for Armed Forces.

(d):    Government  has  undertaken  following policy  initiatives  for  indigenous  manufacturing  of state-of-the-art  defence  products  and  transfer  of  defence  technology  from  foreign  countries  to India:-

- i. Specific provisions have been introduced in DAP-2020 under 'Buy and Make (Indian)' and 'Buy (Global - Manufacture in India)' category wherein indigenous production is carried out with Transfer of Technology (ToT) from foreign OEM.
- ii. Discharge  of  offset  obligations  by  foreign  OEMs  through  ToT  to  Indian  enterprises including government institutions has been incorporated and higher multiplier has been assigned to ToT under offset discharge.
- 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  can  tie  up  with  global  Original Equipment  Manufacturers  (OEMs)  to  seek  technology  transfers  to  set  up  domestic manufacturing infrastructure and supply chains.
- iv. The Government of India has enhanced FDI in Defence Sector up to 74% through the Automatic Route for companies seeking new defence industrial license and up to 100% by Government Route wherever it is likely to result in access to modern technology or for other reasons to be recorded.

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