Lok Sabha Question No. 2235 (UNSTARRED), answered on 2022-07-29
Subject: Indigenous Manufacturing of Defence Equipment
Ministry: DEFENCE
Asked by: Rattan Lal Kataria

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE

## LOK SABHA UNSTARRED QUESTION NO. 2235

TO BE ANSWERED ON 29 th  July, 2022

## INDIGENOUS MANUFACTURING OF DEFENCE EQUIPMENT

## 2235. SHRI RATTAN LAL KATARIA:

Will the Minister of DEFENCE be pleased to state:

- (a)  whether  with  an  objective  to  reduce  dependence  on  import  of  defence  equipment,  the Government has earmarked 68 percent of its capital procurement budget of the defence sector for the domestic industry;
- (b) if so, the details thereof;
- (c) whether the said decision is likely to increase the induction of indigenously manufactured weapons in the armed forces and if so, the details thereof; and

(d)  the  other  steps  taken  by  the  Government  for  encouraging indigenous  manufacturing of defence equipment?

## A  N  S  W  E  R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

- (a) & (b):  Yes, Sir. In line with the Government's philosophy of 'Atmanirbhar Bharat', the Ministry of Defence has earmarked 68% (Rs. 84,597.89 Crore) of the Capital Procurement budget for domestic industry in the current FY 2022-23.
- (c)  &  (d):    Yes,  Sir.  In  this  regard,  the  Steps  taken  by  the  Government  for  encouraging indigenous manufacturing of defence equipment are given below:-

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 reducing import of defence equipment. These initiatives, inter-alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)- 2020; 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 start-ups & Micro, Small and Medium Enterprises (MSMEs); Implementation of Public Procurement (Preference to Make in India) Order 2017; 'Policy for Indigenisation of components and spares used in Defence Platforms in March 2019, 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;  and Establishment  of  two  Defence  Industrial  Corridors,  one  each  in  Uttar  Pradesh  and  Tamil Nadu.

Further,  Government  has  taken  steps  for  self-reliance  in  all  the  defence  related projects.  Three  positive Indigenisation  Lists  comprising  of  310 (101+108+101) items were promulgated by Department of Military Affairs (DMA)/Ministry of Defence (MoD) on 21 August  2020,  30  May  2021&  07  April  2022,  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.

In  continuous  pursuit  of  self-reliance  in  defence  manufacturing  and  to  minimize import  by  DPSUs,  DDP/MOD  has  notified  two  Positive  Indigenisation  List  (PIL)  of  subsystems/  assemblies/  sub-assemblies/  components  on  27 th December  2021  &  28 th March 2022. The I st list contains 2500 items, which are already indigenized and 351 items which will be indigenized in 3 years (Dec-22, Dec-23 & Dec-24). The Second (2 nd ) PIL consists of 107 strategic important Line replacement units/ major sub-assemblies. The list of these items and their details are available on SRIJAN portal for Industry to show their interest. Till date, 147 items out of 351 items from the 1 st Positive Indigenization List & 4 items out of 107 items from the 2 nd Positive Indigenisation List have been indigenised.

In continuous  pursuit of self-reliance in defence manufacturing under '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 (eighteen) major platforms have been identified and announced by the Ministry of Defence for industry led Design & Development  under  various  routes  prescribed  in  Defence  Acquisition  Procedure-2020, namely,  Make-I,  Make-II,  Special  Purpose  Vehicle  (SPV)  and  Innovations  for  Defence Excellence (iDEX). These platforms have been identified after extensive consultations with the Services, DRDO and the Industry.

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