Lok Sabha Question No. 4030 (UNSTARRED), answered on 2023-03-24
Subject: Acquisition of Indigenously Produced Defence Products
Ministry: DEFENCE
Asked by: S. Jagathrakshakan

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE

## LOK SABHA UNSTARRED QUESTION NO. 4030

TO BE ANSWERED ON 24 th  March, 2023

## ACQUISITION OF INDIGENOUSLY PRODUCED DEFENCE PRODUCTS

4030.  SHRI S. JAGATHRAKSHAKAN:

Will the Minister of DEFENCE be pleased to state:

- (a)  whether the Government agrees with the view that there is a need for greater acquisition of  indigenously-produced  defence  products  by  the  Indian  armed  forces  to  establish  the credibility of these products internationally;
- (b)    if  so,  the  details  thereof  along  with  the  steps  taken/proposed  to  be  taken  by  the Government in this regard; and
- (c)  if not, the reasons therefor?

## A  N  S  W  E  R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

(a) to (c):  Yes, Sir. Capital procurement of Defence equipment is carried out as per Defence Acquisition  Procedure  (DAP-2020)  with  a  focus  on  'Atmanirbhar  Bharat'  and  'Make  in India'.  DAP-2020  introduced  major  policy  initiatives  for  boosting  indigenous  defence capability  and  reduction  of  reliance  on  imports.  Further,  DAP-2020  gives  the  highest preference  to  Buy  Indian  (Indigenously  designed  development  &  manufactured,  IDDM) category  of  acquisition  and  Buy  (Global)  is  permitted  only  in  exceptional  situations  with specific approval of Defence Acquisition Council (DAC)/Raksha Mantri.

To  achieve  self-reliance  in  defence  Sector  and  to  provide  impetus  to  design, development  and  manufacture  of  defence  equipment/platforms  in  India,  following  policy decision have been taken by the Government: -

- i. A new category of Buy (Global-Manufacture in India) has been introduced. This category encourages Foreign Original Equipment Manufacturers (OEMs) to set up 'Manufacturing/maintenance entities' through its subsidiary in India.
- ii. The Government has introduced Make III categories with the objective of selfreliance through import substitution.
- iii. Notification  of  the  'Positive  Idigenisation  lists'  of  weapons/platforms  which are banned for import and to be indigenously manufactured.
- iv. Reservation  of  Cases  with  Acceptance  of  Necessity  (AoN)  cost  ≤  Rs.100 crores, extendable to Cases of AoN cost ≤ Rs.150 crores if annual cash flow based on deliveries is below Rs. 100 crores for MSMEs.

- v. Simplification of Industrial licensing process with longer validity period.
- vi. Launch  of  innovations  for  Defence  Excellence  (iDEX)  scheme  involving start-ups & Micro, Small and Medium Enterprises (MSMEs).
- vii. Reforms in Offset policy with thrust on attracting investment and Transfer of Technology of Defence manufacturing by assigning higher multipliers.
- viii. Launch of indigenisation portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs.
- ix. Establishments of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu.
- x. Opening up of Defence Research & Development (R&D) for industry, startups  and  academia  with  25  percent  of  defence  R&D  budget  earmarked  to promote development of defence technology in the country.
- xi. Progressive increase in allocation of Defence Budget of military modernisation for procurement from domestic sources.

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