A shot in the Arm for India’s Defence Industry
As part of raising its guard against external threats, the Government of India has decided to give a boost to the country’s defence manufacturing sector. Apart from banning the import of 101 defence-related products, which is intended to promote domestic production, the DRDO has prepared a list of 108 military systems and subsystems for India’s defence industry to design, develop and manufacture.
The face-off with China on the border and the continuing skirmishes with Pakistan have reminded India of the need to be constantly prepared for any eventuality. These incidents have also spurred the Indian government to launch a series of crucial measures to enhance the defence preparedness of the country.
Among the major initiatives set in motion by the government is the move to ban imports of over 100 items of military equipment with the aim of making the nation more self-reliant in weapons manufacturing. This step is also a part of the programme announced by Prime Minister Narendra Modi to increase the overall domestic production.
According to the Ministry of Defence (MoD), imports of 101 items of military equipment would be banned so that their indigenous production receives a boost. The Prime Minister had earlier issued a call for ‘Atmanirbhar Bharat’, or a self-reliant nation.
Giving details of the initiative, India’s Defence Minister Rajnath Singh said the government is planning to implement the embargo on defence imports in a phased manner from 2020 to 2024. “Our aim is to apprise the Indian defence industry about the anticipated requirements of the Armed Forces so that they are better prepared to realize the goal of indigenization,’’ Singh said in a tweet.
“This is a big step towards self-reliance in defence. This decision will offer a great opportunity to the Indian defence industry to manufacture the items in the negative list by using their own design and development capabilities or adopting the technologies developed by DRDO to meet the requirements of the armed forces,” Singh tweeted.
“The promulgation of the list, which will be reviewed and expanded every year as domestic production capacity increases, will allow lead-time to the Indian industry to prepare itself about the anticipated requirements of the armed forces,” said Singh.
India has an unenviable reputation as a top importer of arms and equipment. For instance, the country was the world’s second-largest buyer of foreign weapons after Saudi Arabia during the years 2015-19, accounting for 9.2 per cent of the total global arms imports.
Focus on Self-Reliance
Launching the ‘Atmanirbhar Bharat’ campaign in May 2020, the Prime Minister said the country will stop importing weapons that can be made domestically. “This move can make the economy more self-reliant amid the coronavirus pandemic,” he said.
Even though the government has banned outright procurements of the 101 products from abroad, it has allowed Indian public sector and private firms to tie-up with foreign manufacturers to produce them in India. This measure is in the backdrop of the decision to increase the FDI limit from 49 per cent to 74 per cent in the defence production sector through the automatic clearance route. The list of banned items also includes the 123 Tejas light combat aircraft that Indian Air Force (IAF) is planning to induct at a cost of over Rs 85,000 crore. According to the Indian government, this is aimed to ensure that the indigenous content in similar products is increased progressively.
The Defence Minister said 260 deals worth Rs 3.5 lakh crore for items now being banned were contracted for the Indian armed forces between April 2015 and August 2020. After the negative list comes into effect, contracts worth almost Rs 4 lakh crore will be given to the domestic industry in the coming six to seven years. “This will include products worth Rs 1.3 lakh crore for the Army and IAF, and another 1.4 lakh crore for the Navy,” said Singh.
Meanwhile, the Ministry of Defence (MoD) has also bifurcated the Rs 1.18 lakh crore capital outlay for 2020-21 between domestic and foreign capital procurement routes. “A separate budget head has been created with an outlay of nearly Rs 52,000 crore for domestic capital procurement in the current financial year,” said the Minister.
“All necessary steps will be followed to ensure that timelines for production of equipment as per the negative imports list are met. This will include a coordinated mechanism for hand holding of the industry by the armed forces,” he said.
Giving an example, Singh, referring to the wheeled armoured fighting vehicles, said the Army is expected to buy around 200 of them at an approximate cost of over Rs 5,000 crore, with the indicative import embargo date of December 2021. Likewise, the Navy’s expected demands for conventional diesel-electric submarines with the indicative import embargo date of December 2021 would lead to a contract worth around Rs 42,000 crore.
“The negative list was prepared after several rounds of consultations with all stakeholders, including the Army, Navy, IAF, the Defence Research and Development Organisation (DRDO), defence PSUs, Ordnance Factory Board (OFB) and the private industry,” said MoD officials. The current and future capabilities of the Indian industry for manufacturing ammunition, weapons, platforms and equipment within the country were assessed, they added.
DRDO’s list of 108 military systems
At the same time, DRDO has identified 108 military systems and subsystems like navigation radars, tank transporters and missile canisters for India’s domestic industry to design, develop and manufacture.
The list of the items was handed over to the Defence Minister by a high-level delegation from the DRDO. The MoD said the DRDO will also provide support to industries for design, development and testing of these systems on a requirement basis. The initiative is in sync with the government’s focus on achieving selfreliance in the defence sector, it added.
The DRDO has set a target of 2021 for developing the systems and subsystems. “All the requirements of these systems by R&D establishments, armed forces, and other security agencies can be met through development contracts or production orders on suitable Indian industry. This will allow DRDO to focus on the design and development of critical and advanced technologies and systems,” said the MoD’s statement.
The Defence Ministry has set a goal of a turnover of Rs 1.75 lakh crore in defence manufacturing in the next five years that includes an export target of Rs 35,000 crore worth of military hardware.
“Responding to the clarion call given by the Prime Minister for ‘Atmanirbhar Bharat’ (self-reliant India), the DRDO has taken several initiatives to strengthen the indigenous defence ecosystem,” said the ministry.
The present industry base for DRDO comprises 1800 MSMEs along with defence public sector undertakings, ordnance factories and large-scale industries. “DRDO has already taken major initiatives through various policies to involve Indian industry as development-cum-production partners, offering its technology to industry at nominal cost and providing free access to its patents,” said MoD.
“This initiative will support the fastgrowing Indian defence industrial ecosystem and will help the industry to contribute towards ‘Atmanirbhar Bharat’ in a big way,” it added.
The list of items identified by the DRDO for domestic production includes mini and micro UAVs, mountain footbridge, modular bridge, mines laying and marking equipment, armoured engineering reconnaissance vehicle and anti-terrorist vehicle (ATV). Other items that have also found a place on the list are tank transporter, missile canisters, missile storage container, marine rocket launcher, satellite navigation receivers, navigation radars and high nitrogen steel among others.
In a related development, the DRDO launched a contest to promote innovators in the fields of defence and emerging technologies in India to mark the fifth death anniversary of former President A P J Abdul Kalam. According to a Defence Ministry statement, the winners of ‘Dare to Dream 2.0’ contest would be decided after due evaluation by an expert committee. “Award money, up to Rs 10 lakh for start-up and Rs 5 lakh in individual category, will be given to the winners,” it added.
MoD said the contest is being launched by DRDO to ‘promote the individuals and start-ups for innovation in defence and aerospace technologies in the country after the call of ‘Atmanirbhar Bharat’ given by Prime Minister Narendra Modi.’
A noted scientist, Kalam is known as the ‘missile man’ as he was part of many successful projects for development of ballistic missiles and satellite launch vehicle technology during his lifetime. Rajnath Singh also expressed his happiness to announce the contest for the ‘Ignited Minds’, whether innovators or start-ups.