Lok Sabha Question No. 953 (UNSTARRED), answered on 2021-12-03
Subject: Manufacturing of Defence Equipment
Ministry: DEFENCE
Asked by: Balak Nath, Sumedhanand Saraswati, Parvesh Sahib Singh

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

## LOK SABHA UNSTARRED QUESTION NO.953

TO BE ANSWERED ON 3 rd  DECEMBER, 2021

## MANUFACTURING OF DEFENCE EQUIPMENT

953. SHRI BALAK NATH: SHRI SUMEDHANAND SARASWATI: SHRI PARVESH SAHIB SINGH VERMA:

Will the Minister of DEFENCE be pleased to state:

- (a) the details of initiatives taken up by the Government to reduce import of arms and promote indigenous manufacturing of defence equipment under the 'Make in India' programme;
- (b) the percentage of arms and ammunition used by the military that are produced indigenously along with the percentage of such equipment imported from other countries;
- (c) the types and quantum of defence equipment imported by India prior to the year 2014;
- (d) the name of countries and the quantum of defence equipment being exported at present along with the major arms and ammunitions exporters to India, percentage-wise; and
- (e)  the  proportionate  distribution  of  arms  and  ammunition  production  between  private  and public sector enterprises in the country?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

(a)  The  Government  has  taken  several  policy  initiatives  and  brought  reforms  to  encourage indigenous design, development and manufacture of defence equipment within the country, with

an aim to reduce dependency on imports. 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 for which there  would  be  an  embargo  on  the  import  beyond  the  timeline  indicated  against  them; Simplification of Industrial licensing process with longer validity period; Liberalization of FDI policy allowing 74% FDI under automatic route; Simplification of Make Procedure; Launch of Innovations for Defence Excellence (iDEX) scheme involving Startups & 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.

(b) As per the data received from Controller General of Defence Accounts (CGDA), the details of procurement of defence equipment (both Capital and Revenue) by the three Services (Army, Navy and Air Force) in the last three years and the current year (Upto September, 2021) are as follows:

(Value in Rs Crore)

| Year                           |   Total expenditure on Procurement (both capital and revenue) |   Expenditure on Procurement (both capital and revenue) from Domestic sources |   Expenditure on Procurement (both capital and revenue) from Foreign sources |
|--------------------------------|---------------------------------------------------------------|-------------------------------------------------------------------------------|------------------------------------------------------------------------------|
| 2018-2019                      |                                                         93474 |                                                                         50500 |                                                                        42974 |
| 2019-2020                      |                                                        108340 |                                                                         63722 |                                                                        44618 |
| 2020-2021                      |                                                        139341 |                                                                         88632 |                                                                        50709 |
| 2021-22 (Upto September, 2021) |                                                         62975 |                                                                         41724 |                                                                        21251 |

(c) Capital Procurement of defence equipment are undertaken from various domestic as well as foreign vendors, based on threat perception, operational challenges  and technological  changes and to keep the Armed Forces in a state of readiness.

Prior to 2014, during 2012-13 & 2013-14, 115 contracts were signed, out of which 49 contracts  were  signed  with  foreign  vendors  for  capital  procurement  of  defence  equipment  for Armed Forces.  The major defence equipments imported during the said period include aircrafts, helicopters, missiles etc.

(d) Based on the export Authorisations/ Licenses issued by Department of Defence Production and actual exports done by Defence Public Sector Undertakings (DPSUs) and private industries, some of major items exported in the past few years, are Fast Patrol Vessels, Coastal Surveillance System  (CSS),  Light  Weight  Torpedoes,  Light  Weight  Torpedo  Launcher  and  Parts,  Do-228 Aircraft,  Wheeled  Infantry  Carrier,  Light  Specialist  Vehicle,  Mine  Protected  Vehicle,  Passive Night  Sights,  Battle  Field  Surveillance  Radar  Extended  Range,  Integrated  Anti-Submarine Warfare,  Advanced  Weapons  Simulator,  Personal  Protective  items,  155mm  Artillery  Gun Ammunition, Small Arms and Ammunitions, Weapon locating Radars, Identification of Friend or Foe (IFF) -Interrogator etc. Further, the value of defence exports during the last four year and the current year (Upto November, 2021) is as under:

| Year                                         |   2017-18 |   2018-19 |   2019-20 |   2020-21 |   2021-22 (Upto November, 2021) |
|----------------------------------------------|-----------|-----------|-----------|-----------|---------------------------------|
| Value of Export Authorisation (Rs. in Crore) |      4682 |     10746 |      9116 |      8435 |                            4586 |

Considering the strategic sensitivity of the matter and in the interest of national security, the country-wise details of exports and imports cannot be divulged.

- (e)  Further,  year-wise  annual  Turnover  as  obtained  from  Defence  Public  Sector  Undertakings (PSUs), other PSUs and private companies operating in defence for the last four years and the current year (Upto September, 2021) is as below:

| Year                           |   Private Companies |   DPSUs & Other Public Sector Undertakings | Total Production (in Rs Cr)   |
|--------------------------------|---------------------|--------------------------------------------|-------------------------------|
| 15347                          |               63473 |                                      78820 | 2017-18                       |
| 17350                          |               63770 |                                      81120 | 2018-19                       |
| 15894                          |               62676 |                                      78570 | 2019-20                       |
| 2020-21                        |               17292 |                                      67375 | 84667                         |
| 2021-22 (Till September, 2021) |                8483 |                                      25860 | 34343                         |

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