Lok Sabha Question No. 515 (UNSTARRED), answered on 2022-02-04
Subject: Manufacturing in Defence Sector
Ministry: DEFENCE
Asked by: Brijbhushan Sharan Singh, Ram Kripal Yadav, Jagdambika Pal, Sangamlal Kadedin Gupta, Rajendra Agrawal, Pratap Chandra Sarangi, P.P. Chaudhary

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF MILITARY AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 515

TO BE ANSWERED ON 04 TH  FEBRUARY, 2022

## MANUFACTURING IN DEFENCE SECTOR

## 515. SHRI BRIJBHUSHAN SHARAN SINGH:

SHRI RAM KRIPAL YADAV:

SHRI JAGDAMBIKA PAL:

SHRI SANGAM LAL GUPTA:

SHRI RAJENDRA AGRAWAL:

SHRI PRATAP CHANDRA SARANGI:

SHRI P.P. CHAUDHARY:

Will the Minister of DEFENCE be pleased to state:

- (a) whether the Government has notified an inclusive indigenous list with a view to achieving self-dependence and reducing import in defence manufacturing;
- (b) if so, the details thereof;
- (c)  whether  the  Government  proposes  to  achieve  the  goal  of  hundred  percent  indigenous manufacturing/production of ammunition for Navy and if so, the steps taken and the time limit fixed thereof;
- (d) the details of the likely introduction of stealth guided-missile destroyer in the coming years and  the  details  of  all  the  major  initiatives  taken  for  defence  sector  under  'Make  in  India' programme during last two years; and
- (e) whether the Government has organized any Global Defence Technology Summit to escalate Research and Development in Defence sector and if so, the details thereof?

## A  N  S  W  E  R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

(a): Yes, Sir.

- (b): (i) Two Positive Indigenisation Lists comprising 101 and 108 items were promulgated on 21 Aug 2020 and 31 May 2021 respectively. The lists have been hosted on Ministry of Defence Website to give wide visibility to the Defence Industrial base in enabling them to effectively meet requirements of the Armed Forces. The lists comprise not  just  of  simple  equipment  but  also  some  high  technology  weapon  systems  like, Artillery  Guns,  wheeled  Armoured  Fighting  Vehicles,  Light  Combat  Aircraft,  Light Combat  Helicopters,  Next  Generation  Missile  Vessels  &  Corvettes,  Land  based  High Power  Radars,  Land  based  Short  Range  Surface  to  Air  Missiles,  rockets,  bombs,  and many other items to meet needs of our Defence Services.

(ii) In  addition,  to  minimise  import  by  DPSUs,  Department  of  Defence  Production (Ministry  of  Defence)  has  also  notified  a  Positive  Indigenisation  list  of  sub-systems/ assemblies/ sub-assemblies/ components on 27 Dec 2021. This list contains 2500 items, which are already indigenized and 351 items which will be indigenized in coming 3 years till  December  2024.  The  list  of  these  items  and  their  details  are  available  on  SRIJAN portal on DDP website for Industry to show their interest.

- (c): (i) Yes, Sir. India is on a progressive path to achieve 100% indigenisation of Naval Ammunition.

(ii) 90%  of  Conventional  Naval  Ammunition  by  type  have  been  indigenised.  The balance, which includes niche technologies are being progressed through DPSUs/ Private firms.

(iii) With regard to the guided weapons, such as missile, torpedoes, etc, indigenisation is being taken up progressively through DRDO and Indian Industry.

- (d) (i) As  part  of  the  modernisation  process  of  the  Indian  Navy,  four  Visakhapatnam class destroyers (Project 15B), which are upgraded version of the Kolkata class ships, are being  constructed  at  Mazagon  Dock  Shipbuilders  Ltd,  Mumbai.The  first  ship  of  the Project  15B,  INS  Visakhapatnam  was  commissioned  on  21  November  2021.  Balance three ships of the project are being targeted for delivery between 2022 to 2024.
- (ii) Details are placed at Annexure .
- (e): Government  has  organised  a  Def  Expo-2020  and  Aero  India-2021.  Also,  DRDO  has organized the seminar on Energising the R&D capabilities with Industry, Academia & Certification Aspects for 'Aatmanirbhar Bharat' during Aero India-2021.

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## ANNEXURE

## ANNEXURE REFERRED TO IN REPLY TO PART (d) OF LOK SABHA UNSTARRED QUESTION NO. 515 FOR ANSWER ON 04.02.2022 REGARDING 'MANUFACTURING IN DEFENCE SECTOR' .

## MANUFACTURING IN DEFENCE SECTOR

1. Details  of  other  major  initiatives  for  defence  sector  under  'Make  in  India'  programme during last two years are as follows: -

## (a) Defence Acquisition Procedure 2020 (DAP-2020)

- (i) DAP-2020  promulgated  by  MoD  in  October  2020,  is  aligned  with  the Government's  vision  of  Atma  Nirbhar  Bharat  and  lays  emphasis  on  higher indigenous content in procurement and faster acquisition for the Armed Forces.
- (ii) In  order  to  promote  indigenous  design  and  development  of  defence equipment, 'Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}' category has been accorded top most priority for procurement of capital equipment.
- (iii) Reforms in Offset policy have been included in DAP 2020, with thrust on attracting investment and Transfer of Technology for Defence manufacturing, by assigning higher multipliers to them.
- (b) MAKE Projects . A comprehensively revamped 'Make' procedure has been introduced  in  DAP-2020  to  facilitate  indigenous  design  and  development  of  defence equipment both with government funding and Industry funding, as follows: -
- (i) 'Make  I'  sub-category  is  aimed  at  addressing  projects  involving  design and  development  of  major  equipment/  systems/  platforms  necessitating  critical technologies  and  large  infrastructure  investment,  with  development  periods  not less than one year. Such projects involve Govt. funding of 70%.
- (ii) Make  II  and  Make  III  acquisition  categories  have  been  tailor-made  to encourage  Pvt  Sector  participation  with  provisions  that  lead  to  assured  orders after successful development.  In Make-II, if solutions have been offered even by a single individual or a firm or Suo- Moto proposal, the cases can be progressed as  a  Resultant  Single  Vendor.  AIP  once  granted  is  not  retracted  even  if DRDO/DPSUs  are  developing  the  item.  Make-III  is  a  new  category  added  in DAP-20 that allows for manufacture of products in India as import substitution for support of weapon systems/ equipment held in the inventory of the Services.
- (iii) 63  MAKE  projects  are  being  co-developed  with  the  Indian  defence industry, including MSMEs and Start-ups. Details of the same are available on the DDP/ MoD official website.

- (c) FDI Limit in Defence . FDI  limit in defence manufacturing under the automatic route has been increased from 49% to 74%, and 100% after Govt clearance. With large platforms like ships & submarines, Mini UAVs, Electronic Warfare/ advanced Communication  systems,  technology  intensive  armament/  ammunition/  missiles  falling under  the  purview  of  imports  embargo,  many  opportunities  will  open  up  for  JVs/ collaboration with global majors.
- (d) Enhanced Budget for Domestic Procurement . The quantum of funds earmarked for domestic industry has risen from 57.67% of Capital Budget in FY 2020-21 to over 64.09% in FY 2021-22. Approximately 71% of proposals accorded AoN in the Annual Acquisition Plan (AAP) 2021-23 fall under the Indigenous category, out of which more than 15% have been earmarked for Indian private entities.
- (e) iDEX .  An  innovation  ecosystem  for  Defence  titled  Innovation  for  Defence Excellence  (iDEX)  has  been  launched  in  April  2018.  iDEX  is  aimed  at  creation  of  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 and provide them grants/ funding and other support to carryout R&D which has potential for future adoption for Indian Defence and Aerospace needs.
- (f) Technology Development Fund (TDF) . Government has set up the Technology  Development  Fund  (TDF)  to  encourage  participation  of  public/  private industries  especially MSMEs through provision of grants, so as to create an ecosystem for enhancing cutting edge technology capability for defence applications.
- (g) Mission Raksha Gyan Shakti . The  MoD  has  instituted  a  new  framework titled ' Mission Raksha Gyan Shakti ' which aims to provide boost to the IPR culture in indigenous defence industry.
- (h) Import Substitution of High Value & Complex Spares . Through the efforts of the  Department  of  Defence  Production  and  the  Services,  drive  for  identification  and indigenisation of all high value and complex spares through domestic Indian industry is underway. Towards this, a user friendly hub portal 'Srijan' has also been hosted by the Ministry of Defence.
- (i) Projects by DRDO. 52  projects  are  underway  by  DRDO  in  Mission  Mode  to meet critical defence equipment requirements of the three Services, wherein the DPSUs/ Private Industries are the production agency.

(j) Defence Industrial Corridors . Government  has  established  two  Defence Industrial  Corridors,  one  each  in  the  States  of  Uttar  Pradesh  and  Tamil  Nadu.  The investments  of  Rs  20,000  Crore  have  been  envisaged  in  Defence  corridors  of  Uttar Pradesh and Tamil Nadu by year 2024. Moreover, the respective State Governments have also announced their Aerospace & Defence Policies to attract private players as well as foreign  companies  including  Original  Equipment  Manufacturers  (OEMs)  in  these  two corridors.

(k) Preference to MSMEs . Cases  with  AoN  cost  ≤  Rs  100  Crs  have  been reserved for MSMEs (provided at least two or more MSMEs are eligible to participate in the category).

- (l) Transfer  of  Technology  (TOT)  to  Industries. DRDO developed technologies are being transferred to industries by entering into Licensing Agreement for Transfer of Technology  (LATOT).  These  technologies  are  hosted  on  DRDO  website  and  Indian industry  can  take  these  high  end  defence technologies  as  per  the provisions  on  DRDO policy and procedure for transfer of technology. In year 2021, 182 LATOTs were signed with industries.
- (m) Test Facility support to Industries . Several world class test facilities have now been opened for industries in DRDO labs and necessary SOP has been formulated.
- (n) Scientific  and  Technological  Support .  Scientific  and  Technological  support  is provided to industry by DRDO on need basis.
- (o) DRDO Patents . The details of the DRDO patents are available on DRDO website for  use  by  industries.  These  patents  are  available  free  of  cost  to  industries  to  enable Atmanirbhar Bharat.

(p) Government-  Owned  Company  Operated  (GOCO) .  under  GOCO,  private industries will operate and maintain DRDO assets, sparing them from the need to invest in land, machinery or other support systems.

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