Lok Sabha Question No. 3821 (UNSTARRED), answered on 2022-03-25
Subject: Development of Defence Sector
Ministry: DEFENCE
Asked by: Sunil Kumar Mondal

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF MILITARY AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 3821

TO BE ANSWERED ON 25 TH  MARCH, 2022

## DEVELOPMENT OF DEFENCE SECTOR

## 3821. SHRI SUNIL KUMAR MONDAL:

Will the Minister of Defence be pleased to state:

- (a)  the  details  of  the  schemes  or  programmes  formulated  to  develop  Defence  sector  and  to strengthen Army, Navy and Air Force along with the achievements made and future initiatives proposed thereunder; and
- (b) the budgetary allocation made by the Government for the development of the defence sector during the financial year, 2021-22?

## A  N  S  W  E  R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

(a):    Various  schemes  and  programs  have  been  formulated  to  develop  the  defence  sector  and strengthen the Indian Armed Forces.  Some of the schemes/programmes are as given below:

## Indigenization of imported items

- (i) In a significant boost to Atmanirbhar Bharat Abhiyan and in sync with the announcement in the Union Budget 2022-23 that allocated 25% of Defence R&D Budget for industry led R&D, 18  major  platforms  have  been  approved  by  the  Government  for  industry  led  Design  & Development under various routes.
- (ii) As part  of  the  efforts  to  achieve  self-reliance  in  Defence  manufacturing  and  minimize imports by the DPSUs, a positive indigenization list has been notified by the Government. The list  contains  2,500  imported  items  which  have  already  been  indigenized  and  351  high  value imported items which will be indigenized in the next 3 years. These items are to be procured only from Indian industry after the timelines indicated in the list.
- (iii) An indigenization portal, namely, SRIJAN has been launched in August 2020 for DPSUs/ OFB/ Services with an industry interface to provide development support to MSMEs/ Startups/ Industry  for  import  substitution.    As  on  date,  18463  items  are  available  for  Public  View  on SRIJAN portal and 277 companies have already shown interest against 3786 items.

(iv) Make-II: Procedure for 'Make-II' category (Industry funded), introduced in DPP 2016 to encourage  indigenous  development  and  manufacture  of  defence  equipment  has  number  of industry  friendly  provisions  such  as  relaxation  of  eligibility  criterion,  minimal  documentation, provision  for  considering  proposals  suggested  by  industry/individual  etc.  So  far,  67  projects relating to Army, Navy & Air Force, have been accorded 'Approval in Principle'.

(v) In  order  to  encourage  local  suppliers  in  public  procurements  under  the  latest  Public Procurement  Order  2017  dated 16 th September,  2020,  the  Government  has  notified  list  of  46 items  for  which  there  is  sufficient  local  capacity  and  local  competition,  only  'Class-I  local supplier', as defined under the order, shall be eligible to bid irrespective of purchase value.

(vi) In  order  to  provide  impetus  to  self-reliance  in  defence  manufacturing  as  part  of  the Atmanirbhar  Bharat  Abhiyan,  two  positive  indigenization  lists  of  209  weapons/  platforms/ systems/ ammunitions etc. have been notified.

## Promoting investment and Technology Transfer in Defence Sector

(vii) Defence Industrial Corridors at UP and TN: Two (02) Defence Industrial Corridors (DICs),  one  in  Tamil  Nadu  with  five  nodes  across  Chennai,  Hosur,  Coimbatore,  Salem  and Tiruchirappalli,  and  another  in  Uttar  Pradesh  with  six  nodes  across  Aligarh,  Agra,  Jhansi, Kanpur, Chitrakoot and Lucknow have been set up to attract investment in each of the two DICs.

(viii) To  give  further  impetus  to  the  growth  of  Defence  Industrial  Corridors,  both  the  DICs have been integrated with the Prime Minister's 'Gati Shakti' National Master Plan.

(ix) M/s Indo Russian Rifles Private Limited (IRRPL) located at Korwa, Amethi district is an India-Russia  JV  to  manufacture  AK-203  rifles  within  the  country.  Order  amounting  to  Rs. 5,124.97  crore  for  manufacturing  6,01,427  AK-203  rifles  has  been  placed  on  the  JV  on 06.12.2021.

(x) The  Government  has  further  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.    FDI  inflows  of  over  Rs  3243  crores  have  been  reported in  defence  and aerospace sector since 2014 till January 2022.

(xi) Further, a total of 568 Industrial licenses have been issued in Defence sector since 2001, out of which 357 have been issued after 2014.

## Supporting Startup Ecosystem and Technology development

(xii) iDEX: Innovations for Defence Excellence (iDEX) was launched with the objective of bringing Start-ups to innovate develop technologies and solve problems related to defence and aerospace. At present, 81 military problems have been opened, 130 startups have been engaged, 65 contracts have been signed. 1 contract worth Rs. 13 crore for procurement of country's first

indigenously  developed  Robotic  Lifebuoys  under  the  iDEX  challenge  "Unmanned  Surface Vehicles" has materialized by the Indian Navy  with a Startup -Saif Seas, based at Visakhapatnam.

- (xiii) The Government has also approved a Scheme with an outlay of Rs. 498.78 crore (202122 to 2025-26) to push innovation and support startups in Defence & Aerospace sector.
- (xiv) AI in Defence : Artificial Intelligence has much more potential to develop many state-ofart technologies which will be useful in Defence Sector. Therefore, Government has decided to develop  several  AI  Projects  in  defence  sector.  Presently,  61  AI  projects  are  planned  by  the DPSUs out of which 26 AI projects have been developed.

## Ease of Doing Business

(xv) Ministry  of  Defence  has  launched  a  scheme  for  awarding  Self  Certification  Status  to DPSUs and Private Industry in May 2019 wherein these have been delegated the responsibility of certifying the Quality of products to the manufacturer on behalf of the purchaser, after selfevident  Quality  system  that  meet  requisite  standards.  The  achievements  of  various  schemes under the government's policy of 'Make in India' and Ease of doing business are given below:

| Green Channel Status          | Granted to 20 Firms                                         |
|-------------------------------|-------------------------------------------------------------|
| New Self Certification Scheme | Granted to 07 Firms                                         |
| Third Party Inspection        | 06 Firms Registered and Rate Contract signed with 03 firms. |
| Defence Export Promotion      | Certificate issued to 11 Firms                              |

(xvi) The Ministry has formulated Defence Testing Infrastructure Scheme (DTIS) for creating 6  to  8  Greenfield  Defence  Testing  Infrastructures  in  the  country.  The  scheme  would  help  in achieving Atmanirbharta in the Defence Testing Infrastructure for the domestic industry. RFPs for all eight different Test Facilities have been already issued and cases pertaining to two Test Facilities are under final stage of scrutiny.

(xvii)  SOP  for  allotment  of  Proof/field  firing  ranges  of  Ministry  of  Defence  to  Indian  Private industry was promulgated in June 2019. This would facilitate Indian private firms in testing their products. A total of 23 Proof/Field firing ranges have now been opened to private industry.

## MSMEs in Defence sector

(xviii)  The Micro, Small and Medium Enterprises (MSME) vendor base of DPSUs and OFB has increased from 8000 in 2018-19 to more than 13000 in 2020-21, thereby creating opportunities for employment.

Apart from the above, DRDO has taken the following steps to develop the Defence sector and to strengthen the armed forces:

…….4/-

- (xix) Transfer  of  Technology  (TOT)  to  Industries:  Indigenous  technology  is  the  key  for strengthening R&D base within the country.  DRDO has laid down procedure by which DRDO developed technologies are transferred to industries by  entering  into  Licencing  Agreement for Transfer  of  Technology  (LATOT).    Till  date,  more  than  1400  Nos.  of  LATOT  have  been transferred to Indian industries.
- (xx) Test Facility support to Industries: More than 60 Test facilities have now been opened for industries in DRDO labs and necessary SOP has been formulated.
- (xxi) Technology Development Fund (TDF): DRDO has launched Technology Development Fund (TDF) which provides financial support to the Indian industries for the design development of innovative defence products.  41 projects have been awarded till date under TDF scheme.
- (xxii) Scientific and Technological Support is provided to industry by DRDO on need basis.
- (xxiii)  Under  Government-Owned  Company  Operated  (GOCO)  model,  private  industries  are being allowed to operate and maintain DRDO assets in select cases, sparing them from the need to invest in land, machinery or other support systems.

The  modernization  of  the  Armed  Forces  is  being  progressed  as  part  of  a  deliberate  and comprehensive Long Term Perspective Plan based on the changing operational scenario and the advancement in warfare technology.

- (b):    The  details  of  Budget  Estimates  (BE)  and  Revised  Estimates  (RE)  under  Revenue  and Capital Heads of Defence Services Estimates in FY 2021-22 are as under:

(Rs. in crore)

| Head                          | BE          | BE          | BE          | RE          | RE          | RE          |
|-------------------------------|-------------|-------------|-------------|-------------|-------------|-------------|
| Revenue (Net)                 | 2,12,027.56 | 2,12,027.56 | 2,12,027.56 | 2,29,567.23 | 2,29,567.23 | 2,29,567.23 |
| Capital                       | CA*         | OTCA**      | Total       | CA          | OTCA        | Total       |
|                               | 1,11,463.21 | 23,597.51   | 1,35,060.72 | 1,13,717.58 | 25,133.32   | 1,38,850.90 |
| Total Revenue (Net) + Capital | 3,47,088.28 | 3,47,088.28 | 3,47,088.28 | 3,68,418.13 | 3,68,418.13 | 3,68,418.13 |

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