Lok Sabha Question No. 160 (STARRED), answered on 2022-02-11
Subject: Indigenous Production of Defence Equipment
Ministry: DEFENCE
Asked by: Krupal Balaji Tumane, Poonam (Mahajan) Vajendla Rao

MINISTER OF DEFENCE

- (a) to (f) : A Statement is laid on the Table of the House.

*****

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF DEFENCE PRODUCTION

## LOK SABHA STARRED QUESTION NO. 160

TO BE ANSWERED ON 11 TH  FEBRUARY, 2022

## INDIGENOUS PRODUCTION OF DEFENCE EQUIPMENT

## *160.  SHRI KRUPAL BALAJI TUMANE: SHRIMATI POONAM MAHAJAN:

Will the Minister of DEFENCE be pleased to state:

- (a) the details of various equipment being used by the Armed Forces which are manufactured within the country;
- (b) whether the Government proposes to expand the production of defence equipment under the 'Make in India' scheme and if so, the details and the efforts being made in this regard;
- (c)  whether  the  Government  has  achieved  the  targets  relating  to  the  indigenous  production  of defence equipment and if so, the details thereof;
- (d) whether the Government proposes to export indigenously produced defence equipment and if so, the details thereof;
- (e) whether the Government has made any assessment of the funds likely to be saved through decrease in import of defence equipment as a result of indigenous production of such equipment and if so, the details thereof; and
- (f) whether the Government proposes to scrap contracts relating to import of defence equipment and allot them to the Indian companies and if so, the details thereof?

## A  N  S  W  E  R

(SHRI RAJNATH SINGH)

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (f)  OF  LOK  SABHA STARRED  QUESTION  NO. 160 FOR ANSWER  ON  11.02.2022  REGARDING 'INDIGENOUS PRODUCTION OF DEFENCE EQUIPMENT'.

- (a)  Many significant products including 155mm Artillery Gun system 'Dhanush', Light Combat Aircraft 'Tejas', Surface to Air Missile system 'Akash', Main  Battle Tank 'Arjun', T-90 Tank, T-72  tank,  BMP-II/IIK,  Su-30  MK1,  Cheetah  helicopter,  Advanced  Light  Helicopter,  Dornier Do-228,  High  mobility  Trucks,  INS  Kalvari,  INS  Khanderi,  INS  Chennai,  Anti-Submarine Warfare Corvette (ASWC), Arjun Armoured Repair and Recovery Vehicle, Bridge Laying Tank, Bi-Modular  Charge  System  (BMCS)  for  155mm  Ammunition,  Medium  Bullet  Proof  Vehicle (MBPV),  Weapon  Locating  Radar  (WLR),  Integrated  Air  Command  and  Control  System (IACCS), Software Defined Radios (SDR), Lakshya Parachute for Pilotless Target Aircraft, Opto Electronic Sights for battle tanks, Water Jet Fast Attack Craft, Inshore Patrol Vessel, Offshore Patrol Vessel, Fast Interceptor Boat, Landing Craft Utility, 25 T Tugs, etc. have been produced in the country during the last few years which are being used by the Indian Armed Forces.
- (b)  The  Government  has  taken  several  policy  initiatives  in  the  past  few  years  under  'Make  in India'  program and  brought  in  reforms  to  encourage  indigenous  design,  development  and manufacture  of  defence  equipment  in  the  country,  thereby  expanding  the  production  of indigenous  defence  equipment.  These  initiatives, inter-alia,  include  according priority to procurement  of  capital  items  from  domestic  sources  under  Defence  Acquisition  Procedure (DAP)-2020;  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 indigenization portal  namely  SRIJAN  to  facilitate  indigenisation  by  Indian  Industry  including  MSMEs; Reforms in Offset policy  with thrust on attracting investment and Transfer of  Technology  for Defence manufacturing by assigning higher multipliers; Establishment of two Defence Industrial Corridors one each in Uttar Pradesh and Tamil Nadu.
- (c)  The targets of defence production are set for the Defence Public Sector companies as part of MoUs signed  with  them.      The  value  of  production  of  Defence  Public  Sector  companies  has shown  increase  in  the  last  five  (05)  years  except  in  the  year  2020-21  where  operations  were stopped for few months due to COVID-19 as per the table given below:

|   Sl No. | Year    |   Turnover of DPSUs (In Rs Crore) |
|----------|---------|-----------------------------------|
|        1 | 2016-17 |                             40427 |
|        2 | 2017-18 |                             43464 |
|        3 | 2018-19 |                             45387 |
|        4 | 2019-20 |                             47655 |
|        5 | 2020-21 |                             46711 |

- (d)  The  Government  has  major  focus  on  defence  exports  by  public  and  private  sector.  For streamlining defence export processes, Standard Operating Procedures (SoPs) have been issued and export authorisations are issued online through a dedicated Defenceexim portal, which is an end to end solution. In addition, a provision for Open General Export License (OGEL) has been made  as  one-time  export  license,  which  permits  the  industry  to  export  specified  items  to specified destinations, enumerated in the OGEL, without seeking export authorisation during the validity of the OGEL. With these initiatives, the defence exports have jumped almost 600% since 2016-17.
- (e)  While  no  formal  study  has  been  conducted  to  assess  such  savings,  it  has  been  seen  in  the context of many systems/subsystems such as Engines & transmissions for Tanks, Flight Control systems  &  rotor  systems  for  major  Aero  platforms,  Gearbox  for  Offshore  Patrol  Vessels; Software Defined Radios (SDR), Fire Control Systems: Passive Night Vision Device (PNVD), Ammunitions, Konkur Missile test equipment, Muzzle Reference system, etc that the equipment indigenously  designed,  developed  and  manufactured  results  in  significant  savings  besides providing strategic autonomy to the nation.

The table below in the last three years, brings out that increasing reliance has been laid on procurement from domestic sources and the expenditure on procurement from foreign sources has shown significant reduction in percentage terms:

| Year    | Expenditure on Procurement (both capital and revenue) from Domestic sources   | Expenditure on Procurement (both capital and revenue) from Domestic sources   | Expenditure on Procurement (both capital and revenue) from Foreign sources   | Expenditure on Procurement (both capital and revenue) from Foreign sources   | Total expenditure on Procurement (both capital and revenue)   |
|---------|-------------------------------------------------------------------------------|-------------------------------------------------------------------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------|---------------------------------------------------------------|
|         | Value (In Rs. Crore)                                                          | Percentage                                                                    | Value (In Rs. Crore)                                                         | Percentage                                                                   | Value (In Rs. Crore)                                          |
| 2018-19 | 50500                                                                         | 54.0                                                                          | 42974                                                                        | 46.0                                                                         | 93474                                                         |
| 2019-20 | 63722                                                                         | 58.8                                                                          | 44618                                                                        | 41.2                                                                         | 108340                                                        |
| 2020-21 | 88631                                                                         | 63.6                                                                          | 50709                                                                        | 36.4                                                                         | 139340                                                        |

(f) Since the focus of the Government is on indigenization and promotion of domestic defence industry to achieve Atmanirbharta, the proposals which were accorded Acceptance of Necessity (AoN) under Buy (Global) category of Capital Acquisition in the past have been reviewed as per DAP- 2020 and the Defence Acquisition Council (DAC) has approved cancellation/closure of AoN for 09 such proposals worth Rs. 46,695 Crore.

*****