Lok Sabha Question No. 2168 (UNSTARRED), answered on 2022-07-29
Subject: Private players in defence manufacturing
Ministry: DEFENCE
Asked by: Debasree Chaudhuri

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE PRODUCTION

## LOK SABHA UNSTARRED QUESTION NO. 2168

TO BE ANSWERED ON 29 th  July, 2022

## PRIVATE PLAYERS IN DEFENCE MANUFACTURING

2168. MS. DEBASREE CHAUDHURI:

Will the Minister of DEFENCE be pleased to state:

(a)  whether  the  Government  has  been  successful  in  bringing  private  players  in  defence manufacturing sector; and

(b)  if  so,  the  achievements  made  so  far  in  this  regard  along  with  the  measures  taken  by Government to boost defence sector to tackle extreme external threats?

## A  N  S  W  E  R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

(a)  &  (b):    Defence  Industry  sector,  which  was  hitherto  reserved  for  the  public  sector,  was opened up to 100% for Indian private sector participation in May, 2001.Since the opening up of Defence sector, a total of 584 Industrial Licenses have been issued to 358 companies for manufacturing of various defence items.The initial validity of the Industrial License granted under the Industries (Development& Regulation) Act has also been increased from 03 years to 15 years. Increase in validity of Industrial Licenses has provided sufficient time and space for companies to start operations and manufacture without hindrance.

Further,  in  order  to  give  a  push  to  domestic  defence  industry,  the  Government  has taken  several  policy  initiatives  in  the  past  few  years 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 to strengthen our armed forces. These initiatives, inter-alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020;  Announcement of 18  major  defence  platforms  for  industry  led  design  &  development  in  March  2022; Notification of  three 'Positive Indigenization Lists' of total 310 items of Services and  two 'Positive Indigenization Lists' of total 2958 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;  Liberalization  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; and Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu; 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; Progressive increase  in  allocation  of  Defence  Budget  of  military  modernization  for  procurement  from domestic sources, etc.

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