7-Oct-2022: Indigenisation of 72 Items by Defence Public Sector Undertakings (DPSUs) before their original timelines

Putting Atmanirbhar Bharat on fast track, 72 items out of total of 214 items mentioned in 1st and 2nd Positive Indigenisation List (PIL) have been indigenised by Defence Public Sector Undertakings (DPSUs) well before their original indigenisation timelines of December 2023, December 2024 and December 2025. The remaining 142 items are being indigenised within the timeline of December 2022. Some of the main Sub-systems/ Line Replacement Units (LRUs) indigenised include Magazine Fire Fighting System for Ships, Steering Gear System and Fin Stabilisers with Control for Frigates, Pressurised containers for Akash Missiles, KOE charge for Konkurs Missiles and Electric Motor, Decontamination set and Prism optical instrument for Battle Tanks.

Beside these items, some critical components include Intermediate Castings for Helicopter, Polychropene Rubber Band for Submarines and High Pressure Regulating Valves for Ships. Details of all the indigenised items are available on "SRIJAN Portal (srijandefence.gov.in)".

It is notable that in pursuit of self-reliance in defence manufacturing and to minimise imports by DPSUs under 'Atmanirbhar Bharat Abhiyan', Department of Defence Production (DDP), Ministry of Defence had notified three Positive indigenisation Lists of LRUs/ Sub-systems/ Assemblies/ Sub­ assemblies/ Components in December 2021, March 2022 and August 2022 respectively with an indicative timeline for their indigenisation. The 1st PIL contains 351 items, 2nd PIL has 107 items and 3rd PIL has 780 items for indigenisation.

Subsequently, DDP has notified the revised timeline of the 72 indigenised items (PIL-1: 67 & PIL-2: 5). Now, these items will be procured only from the Indian Industry thereby giving a boost to the domestic industry including MSMEs and will save foreign exchange. This also reinforces the growing confidence of the Government in the capabilities of domestic industry for supplying items of international standards to meet the demand of the Armed Forces.

8-Aug-2022: Restructuring of Defence Forces

The modernisation/reforms of defence forces is a continuous process based on threat perception, operational challenges and technological changes to keep the Armed Forces in a state of readiness to meet the entire spectrum of security challenges. In order to reduce arms dependency and promote indigenous manufacturing of defence equipment, a comprehensive revamped ‘Make and Innovation’ procedure has been introduced in DAP-20 to facilitate indigenous design and development of defence equipment by private participation both with Government funding and industry funding.

Progressive Promulgation of Positive Indigenisation Lists: A series of Positive Indigenisation Lists of defence weapons & equipment which would not be imported from abroad have been promulgated.  1st Positive Indigenisation List comprising of 101 items was promulgated in August 2020, 2nd Positive Indigenisation List comprising of 108 items was promulgated in May 2021 & 3rd Indigenisation List comprising of 101 items was promulgated in April 2022.

The impact of ‘Aatmanirbhar Bharat’ in defence manufacturing is as given below:

• In line with the budget announcement for F.Y. 2022-2023 of allocating 25% of the Defence R&D budget for industry led R&D, 18 major platforms have been approved by the Government for industry led Design & Development under Make I, Make II, SPV Model and iDEX routes.
• An innovation ecosystem for Defence titled Innovations for Defence Excellence (iDEX) has been launched in April, 2018 to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and Academia, and provide them grants/funding and other support to carry out R&D which has potential for future adoption for Indian defence and aerospace needs. So far, 125 problems have been opened, 136 start-ups have been engaged, 102 contracts have been signed.
• iDEX route of procurement have been simplified and timelines have been compressed from 2 years earlier to just 5 months by reforming the trial process.
• The Government has approved a Scheme with an outlay of Rs 498.78 crore (2021-22 to 2025-26) to push innovation and support start-ups in Defence & Aerospace sector. This will enable more than 300 start-ups to participate in the new design and development projects and also support 20 partner incubators.
• As part of the efforts to achieve self-reliance in Defence manufacturing and minimize imports by the DPSUs, a positive indigenisation list has been notified by the Department. The list contains 2,500 imported items which have already been indigenized and 351 high value imported items which will be indigenised in next 3 years.  Out of 351 items, 147 items have already been indigenised.
• Another list of DPSUs for indigenization of 107 Line Replaceable Units (LRUs)/Sub-systems of high value platform was notified on 28.03.2022. As on date, 4 LRUs have been indigenised; 5 LRUs are at trial stage and 31 LRUs are at design and development stage.
• An indigenisation portal namely SRIJAN has been launched in August, 2020 for DPSUs/OFB/Services with an industry interface to provide development support to MSMEs/Start-ups/Industry for import substitution. So far, more than 21,000 defence items, which were earlier imported, have been displayed on the portal. 388 private vendors have expressed interest in indigenising more than 4,700 items and so far 410 items have been indigenised.
• Separate procedure for ‘Make-II’ category (Industry funded) has been notified to encourage indigenous development and manufacture of defence equipment. Number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry/individual etc. has been introduced in this procedure. So far, 72 projects relating to Army, Navy & Air Force, have been accorded ‘Approval in Principle’. 38 Acceptance of Necessity (AONs), 05 prototypes developed and 2 procurement contracts have been signed by the Services.
• Further, Make-II route of procurement have been simplified and timelines have been compressed from 2 years earlier to just 5 months by reforming the trial process.
• As part of ease of doing business, the export procedure has been simplified and made completely online. This has resulted in an exponential increase in the number of Export Authorizations issued.
• Defence Testing Infrastructure Scheme (DTIS) has been formulated for creating 6 to 8 Greenfield Defence Testing Infrastructures in the country and attain ‘Aatmanirbharta’ in the Defence Testing Infrastructure for the domestic industry.
• As part of the ‘Azadi Ka Amrit Mahotsav’, the Government organised an event ‘AiDef’ on 11th July, 2022 where for the first time 75 defence specific Artificial Intelligence (AI) products were launched by Raksha Mantri. During the event, three AI products of DPSUs were also launched for the market.

5-Aug-2022: Research and Development in Defence Manufacturing

The steps taken by the Government to enhance Research and Development in defence manufacturing are as follows:

• DRDO has introduced a policy on selection of the Development cum Production Partner (DcPP) for DRDO developed systems, which ensures involvement of industries from the beginning of development cycle and lead to reduction in the time-frame of the development-to-induction cycle.
• DRDO has promulgated new Transfer of Technology (ToT) policy and procedure with ‘Nil’ ToT fee for its industry partners Development cum Production Partners (DcPP)/ Production Agency (PA) and ‘Nil’ royalty for supply to Indian Armed Forces and Govt. Dept. This will enhance capabilities and competitiveness of Indian industries in global market. This will also provide further boost to Indian industries in defence manufacturing sector to achieve higher self-reliance.
• DRDO has promulgated new patent policy to facilitate Indian industries to get free access to use DRDO patents. This will provide an access to Indian industries to the innovations carried out by DRDO to further boost up their R&D and develop new technologies.
• DRDO has launched Technology Development Fund (TDF) which provides financial support to the Indian industries including MSMEs & Startups for design & development of innovative defence products. It provides funding through the means of grants-in-aid to design & develop technologies for the systems, components and weapons utilized by Armed Forces. TDF contributes towards shaping an enabling environment for nurturing innovation and boosting the development of indigenous defence manufacturing ecosystem.

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, thereby promoting self-reliance in defence manufacturing & technology in the country. Some of the important steps are as follows:

• According priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020. The announcement of 18 major defence platforms for industry led design & development in March 2022.
• Notification of three ‘Positive Indigenisation Lists’ of total 310 items of Services and two ‘Positive Indigenisation 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.
• Liberalisation of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route.
• Simplification of Make Procedure, Launch of Innovations of 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.
• Opening up of Defence Research& Development (R&D) for industry, startups and academia with 25 percent of defence R&D budget.
• Progressive increase in allocation of Defence budget of Military modernisation for procurement from domestic sources, etc.

22-Jul-2022: Manufacturing of Defence Products

The details of major defence equipment manufactured and supplied by the Defence Public Sector Undertakings (DPSUs) so far are as under:

• Ships and Submarines: Various classes of Frigates, Corvettes, Missile Boats, different class of Destroyer (P-15, P-15A, P-17, P-17A), Submarine (SSK Class Scorpion class), Fast track crafts, Dredger, Landing Craft Utility, Missile Craft Survey vessels, Offshore Patrol Vessels, Tugs and Fuel Barges.
• Missile and Under Water Weapons: Anti-Tank Guided Missile (Milan, konkurs, Invar), Akash Missile System, Medium Range Surface to Air Missile, Astra Missile, Pinaka Rocket system, Light weight Torpedo, Heavy Weight Torpedo, Anti-Torpedo Decoy Launching Systems, Counter Measures Dispensing System and various types of Launchers.
• Electronic Equipment: C4I systems, Communications System, Electronic Warfare and Avionic System, Electro Optic System, Naval System, Radars, Tank Electronics, Thermal engine sight, larger bases equipment, fuzes, different types of Ruggedized cables and harness of battle tanks.
• Armoured and Heavy Vehicles:- Main Battle Tanks (T-72, T-90, Arjun), Infantry Combat Vehicles, BMP-II, Artillery Guns of different calibre (81 mm Mortar, 105 mm, 122 mm, 125 mm, 130 mm and 155 mm), Medek Gun CRN-91, AK 630 M Gun, High mobility vehicles (4x4, 6x6 8x8, 10x10 & 12x12), Heavy Recovery Vehicles, Vehicles Launched Assault Bridge, Dozers Excavators, Motor Graders, Trailers, Towing Tractors, Armoured Ambulance, Multi-Purpose Vehicle and other Ground Support / Handling Equipment for Fighter aircrafts.
• Air Borne Platforms: Fighter Aircrafts (SU30MKI, Light Combat Aircraft, Civilian aircraft (Dornier Do- 228), Helicopters (Advanced Light Helicopter Dhruv, Light Utility Helicopter (LUH), Light Combat Helicopter (LCH), Cheetal and Chetak), Engines and accessories and over haul of variety of Aircrafts/Helicopter/Engine.
• Ammunitions: Large calibre ammunitions (105 mm, 122 mm, 125 mm, 130 mm and 155 mm), Medium calibre ammunitions (20 mm, 30 mm, 81 mm, 84 mm), Small calibre ammunitions (5.56 mm, 7.62 mm & 9 mm), Explosive, Propellants Bombs and Rockets.
• Metallurgical Materials: Special Alloys, Special Grade Alloys Steel, Aluminium alloys, Titanium alloys, forging and casting for vital defence equipment, and Armour for various applications.
• Small Arms: 7.62x39 mm Trichy Assault Rifle, 12.7 mm Air Defence Gun, 33 mm Cannon, MAG Gun 7.62 mm, LMG 5.56 mm, Carbine 9 mm, JVPC 5.56 mm, Revolver .32m, .32 Pistol, 7.62x51 Sniper, 5.56 INSAS, 9mm Pistol, 7.62x39 GHAATAK and 12 Bore Pump Action Gun.
• Other Items: Clothing items and accessories, different varieties of Parachutes (Man carrying, Pilot, Break Supply, Drop, Heavy Drop and illuminating).

Defence products manufactured by the DPSUs undergo Final Acceptance Inspection (FAI) by the Quality Assurance agencies viz Directorate General of Quality Assurance (DGQA), Directorate General of Aeronautical Quality Assurance (DGAQA) and Director General of Naval Armament Inspection (DGNAI) as per the Final Acceptance Procedure. Moreover, manufacturing units of Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Bharat Dynamics Limited (BDL), Mazagon Dock Shipbuilders Limited (MDL), Garden Reach Shipbuilders and Engineers limited (GRSE) and Goa Shipyard Limited (GSL)are certified to the contemporary International Quality Management standards such as AS9100D, EMS 14001, ISO 9001 etc.

18-May-2022: Indigenisation of defence items with the Industry in full swing

In continuous pursuit to achieve self-reliance in defence manufacturing and minimise imports under ‘Aatmanirbhar Bharat’, Department of Defence Production (DDP), Ministry of Defence has intensified the drive for indigenisation of defence items by its DPSUs. The progress is being reviewed on weekly basis by Defence Secretary Dr Ajay Kumar.

A comprehensive user-friendly ‘Dashboard’ on its SRIJAN Portal has been developed to monitor the status of progress of indigenisation. This dashboard enables real-time end-to-end updates of various activities being taken up by the respective DPSUs during the process of indigenisation. It provides transparent information, analytics and various customised reports to assess the performance of the DPSUs.

Relevant information like details of items to be indigenised, tentative order quantity, concerned DPSU, route of indigenisation to be adopted, details of in-charge Nodal Officer, details of expression of Interests, Requests for Proposal, project sanction order etc. have been kept in public domain to make it accessible to the industry.

The dashboard will be accessible by industry shortly. The industry partners can view the details on the dashboard and avail opportunity as per their capabilities in order to become partners in ‘Aatmanirbhar Bharat’. Moreover, the Ministry will monitor the actions taken by the DPSUs through this dashboard. It is expected that the dashboard is likely to become a game changer to intensify the indigenisation process.

It may be mentioned that DDP had notified two Positive Indigenisation Lists in December 2021 and March 2022 in respect of DPSUs. The first list contains 2,851 items, out of which 2,500 items are already indigenised and 351 items are being indigenized. The second report notified 107 major Line Replacement Units/Sub-systems for indigenisation. These items pertain to Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Mazagon Dock Shipbuilders Limited (MDL), Hindustan Shipyard Limited (HSL), Garden Reach Shipbuilders & Engineers Ltd (GRSE), Goa Shipyard Limited (GSL), Armoured Vehicles Nigam Limited (AVNL), Munitions India Limited (MIL), Bharat Dynamics Limited (BDL) and Bharat Earth Movers Limited (BEML). The weekly review at the level of Defence Secretary and the monitoring through dashboard has resulted in substantial progress and the DPSUs are now getting good responses from the industry.

Out of 107 items, DPSUs have already issued Expression of Interest (EoIs) for 98 items and the action is on for issuing EoIs for remaining nine items. Out of the 98 EoIs, 28 cases have already progressed in next stages and 70 EoIs are in active stage. The BEL has already issued five Project Sanction Orders (PSO) to the Industry for development of items under Make –II route. Further, 11 items, including nine items of AVNL and two items of GRSE, are in Prototype Design & Development stage under various routes.

7-Apr-2022: Landmark policy decision to indigenise 101 more weapons and platforms to speed up ‘Aatmanirbharta’ in Defence

Raksha Mantri Shri Rajnath Singh released the third positive indigenisation list of 101 items, comprising major equipment/platforms, in New Delhi on April 07, 2022. The list, notified by Department of Military Affairs, Ministry of Defence (MoD), lays special focus on equipment/systems, which are being developed and likely to translate into firm orders in next five years. These weapons and platforms are planned to be indigenised progressively with effect from December 2022 to December 2027. These 101 items will, henceforth, be procured from local sources as per provisions of Defence Acquisition Procedure (DAP) 2020.

Today’s development follows issue of first list (101) and second list (108) that were promulgated on August 21, 2020 and May 31, 2021 respectively. Import substitution of ammunition which is a recurring requirement has been given special emphasis. The spirit behind issuing these three lists comprising 310 defence equipment, slated to be manufactured locally, reflects the growing confidence of the Government in the capabilities of domestic industry that they can supply equipment of international standards to meet the demand of the Armed Forces. It is likely to stimulate the potential of indigenous Research & Development (R&D) by attracting fresh investment into technology and manufacturing capabilities. It will provide ample opportunities to the domestic industry for understanding the trends and future needs of the Armed Forces.

The third list comprises highly complex Systems, Sensors, Weapons and Ammunitions like Light Weight Tanks, Mounted Arty Gun Systems  (155mmX 52Cal), Guided Extended Range (GER) Rocket for PINAKA MLRS, Naval Utility Helicopters (NUH), Next Generation Offshore Patrol Vessels (NGOPV), MF STAR (Radar For Ships), Medium Range Anti-Ship Missile (Naval Variant), Advance Light Weight Torpedo (Ship Launch), High Endurance Autonomous Underwater Vehicle, Medium Altitude Long Endurance Unmanned Aerial Vehicle (MALE UAV), Anti-Radiation Missiles, Loitering Munitions. Their details are available on the MoD website.

Addressing the audience on the occasion, the Raksha Mantri described the third list as a symbol of 360-degree efforts being made by the Government to achieve Prime Minister Shri Narendra Modi’s vision of ‘Aatmanirbhar Bharat’. He exuded confidence that this new list will prove to be crucial in the development of the domestic industry and take research & development and manufacturing capacity of the country to a higher level.

This third positive indigenisation list has been prepared after in-depth consultations with all stakeholders, such as Defence Research & Development Organisation (DRDO), Department of Defence Production (DDP), Service Headquarters (SHQs) and the private industry. Shri Rajnath Singh assured that, similar to the previous two lists, the time limit given in the third list will also be adhered to. He said, Ministry of Defence and the Service headquarters will take all necessary steps, including handholding of the industry, reiterating the Government’s endeavour to create an ecosystem that ensures self-reliance in defence manufacturing and encourages exports.

The DRDO, too, pitched in to strengthen local manufacturing by signing 30 Transfer of Technology (ToT) agreements with 25 industries. Raksha Mantri handed over the agreements pertaining to 21 technologies developed by 16 DRDO laboratories spread across the country. These technologies concern Quantum Random Number Generator (QRNG), developed by a DRDO Young Scientist Lab (DYSL- QT, Pune), Counter Drone System, Laser Directed Energy Weapon System, Missile Warhead, High Explosive Materials, High Grade Steel, Specialised Materials, Propellants, Surveillance & Reconnaissance, Radar Warning Receivers, CBRN UGVs, Mine Barriers, Fire Fighting Suits, Boots for Anti Mine, etc. So far, DRDO has entered into more than 1,430 ToT agreements with Indian industries, out of which, a record number of around 450 ToT agreements have been signed in last two years.

Congratulating DRDO and the Industry, Shri Rajnath Singh said, the handing over of 30 ToT agreements to the Industry shows the increasing trust of Indian industries in DRDO-developed indigenous technologies. This will further strengthen the manufacturing eco-system in defence systems and platforms, he said, expressing hope that the private sector will make full use of the opportunities being given to them by the Government in order to make India a global defence manufacturing hub.

Listing out the measures taken by the Government to maximise the participation of the domestic industry, the Raksha Mantri said, 68 per cent of capital procurement budget has been earmarked for domestic procurement to promote self-reliance & reduce import dependency. The other measures include earmarking of 25 per cent of defence R&D budget for the industry, start-ups and academia and corporatisation of Ordnance Factory Board.

Shri Rajnath Singh pointed out that despite hurdles, India has always performed exceptionally well, on its own, in areas such as nuclear technology and space technology, due to the grit and determination of its scientists & researchers. With the same resolve, India will soon transform into a global manufacturing hub that caters to the domestic requirements, besides being a dominant force in international market, he added. He described the three lists as a self-imposed vow which can pave the way for a strong and self-reliant ‘New India’. He underscored the importance of self-reliance in defence production and promotion in exports, terming it as a crucial aspect which strengthens the economy as well as national security, besides improving the socio-economic condition of the country.

The Raksha Mantri called for indigenous development of defence equipment and platform technologies, stressing that the import of systems, with foreign software codes, can prove to be dangerous for the security apparatus as it opens the window of vulnerability. Emphasising on the need to focus more on indigenisation, he said, “Today, the scope of defence is not limited to borders only. Anyone can now break into the security system of a country with the help of different communication methods. No matter how strong the system is, if it is linked to another country, there is a possibility of a security breach. Earlier, the defense equipment, such as tanks and helicopters, were mainly mechanical in nature. It was not possible to control them. But, newer defense systems and platforms are electronic and software intensive. They can be controlled or subverted from anywhere.”

Stressing on domestic production of ammunition as it ensures uninterrupted supply during wars, Shri Rajnath Singh appreciated the fact that full attention has been paid to the import substitution of ammunition in the first two positive indigenisation lists. He said, when orders for defence items are given to domestic defense industry, it provides employment to lakhs of people working in MSMEs connected to the sector, spread across the country.

Shri Rajnath Singh maintained that self-reliance does not mean to work in isolation from the rest of the world, but to work with their active participation within the country. “Even under ‘Aatmanirbhar Bharat Abhiyan’, we have provisions which provide suitable opportunities and environment to foreign companies to invest, collaborate, set up joint ventures and earn profit,” he said. The Raksha Mantri reaffirmed the Government’s constant endeavor to create an environment where public, private sector and foreign entities can work together and help India to become one of the world's leading countries in defence manufacturing.

Raksha Rajya Mantri Shri Ajay Bhatt, Defence Secretary Dr Ajay Kumar, Chief of the Air Staff Air Chief Marshal VR Chaudhari, Chief of the Naval Staff Admiral R Hari Kumar, Vice Chief of the Army Staff Lt Gen Manoj Pande, Secretary Department of Defence R&D and Chairman DRDO Dr G Satheesh Reddy, other senior civil and military officials of MoD and representatives of the industry were present on the occasion.

It may be recalled that Prime Minister Shri Narendra Modi had on February 25, 2022 during a post budget webinar ‘Aatmanirbharta in Defence: Call to Action’ appreciated the indigenisation efforts of MoD and announced that the third positive indigenisation list will be promulgated soon.

4-Apr-2022: Indigenisation of Defence Production

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;  Announcement of 18 major defence platforms for industry led design & development; Notification of  two ‘Positive Indigenisation Lists’ of total 209 items of Services and  two ‘Positive Indigenisation Lists’ of 2851 items and 107 Line Replaceable Units (LRUs) 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 start-ups & 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. 

The year-wise Value of Production of Defence and Aerospace Sector of the country for the last two financial years, is as below: 

Further, 68% of the Capital acquisition budget has now been earmarked for domestic sources. To enhance functional autonomy, efficiency and unleash new growth potential and innovation in Ordnance Factories, the production units of Ordnance Factory Board have been converted into 7 Defence Public Sector Undertakings with 41 units, with effect from 1st October 2021. Further, to increase the production capacity of Light Combat Aircraft (LCA), a second plant of LCA ‘Tejas’ Division was established at Bangalore in February 2021. Moreover, 85 new defence industrial licenses to private Industries have also been issued during last two years. 

1-Apr-2022: Aatmanirbhar Bharat initiative in Defence production

In pursuance of the policy of Government of India for “Make in India” and the mandate given in “Aatmanirbhar Bharat Abhiyan” for indigenization and promotion of Indian industry, 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. The details of service-wise platforms cannot be shared in the interest of national security.

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, including design and development of the projects like Kamov 31. 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; 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; and Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu.

A Draft ‘Defence Production & Export Promotion Policy (DPEPP) 2020’ was placed in public domain by the Department of Defence Production, Ministry of Defence and is Ministry of Defence’s overarching guiding document to provide a focused, structured and significant thrust to defence production capabilities of the country for self-reliance and exports in Defence sector, including Aerospace and Naval Shipbuilding sectors.

28-Mar-2022: Indigenous Defence Production

Two Positive Indigenisation Lists comprising 101 and 108 items were promulgated by Department of Military Affairs (DMA)/Ministry of Defence (MoD) on 21st August, 2020 and 31st May 2021 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 requirement of the Armed Forces.  Of these, 153 items are planned to be indigenized upto December, 2022.  There is no stoppage on their exports.

In addition, to minimize import by DPSUs, Department of Defence Production (DDP)/ Ministry of Defence (MoD) has also notified a Positive Indigenisation list of sub-systems/ assemblies/sub-assemblies/components on 27th December, 2021.  The list contains 2500 items, which are already indigenized and 351 items which will be indigenized in coming three years till December, 2024.  Of these 351 items, 172 items are planned to be indigenized upto December, 2022.

Positive Indigenisation List Comprises Defence equipment which will be designed, developed and manufactured over a period from 2020 to 2025, therefore, it will not be possible to assess actual saving at this juncture.

However, as per available projections, it is estimated that over approximately Rupees Five Lakh Crore worth of equipment included in both the Positive Indigenisation Lists will be procured from Domestic Industry over the next five to seven years.

Government is considering adding more items for indigenous production. Time line to add more items is reviewed continuously based on the requirements of Armed Forces as well as capability of Domestic Industry.

14-Mar-2022: Defence equipment projects under Make in India Scheme

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; and Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu. 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.

The indigenous Main Battle Tank (MBT) Arjun Mk-1A designed and developed by the Defence Research and Development Organization (DRDO) is compatible with the present and future requirement of Armed Forces. MBT Arjun Mk-1A is incorporated with 71 upgrades in comparison to MBT Arjun Mk-1, thereby endowed to have superior fire power, enhanced high mobility and excellent protection characteristics required to fulfil the challenging requirements of the battle field.

The Government, in the last three years i.e. from 2018-19 to 2020-21 and current year till December 2021, has accorded Acceptance of Necessity (AoN) to 150 proposals worth Rs 2,47,515 crore approximately, under various categories of Capital procurement which promote domestic manufacturing as per DAP- 2020. In addition, during the last three years i.e. from 2018-19 to 2020-21 and current year till January 2022, out of total 191 Capital acquisition contracts signed, 121 have been signed with Indian vendors for capital procurement of defence equipment for Armed Forces.

17-Dec-2021: Indigenization of Defence Products

Two Positive Indigenisation Lists comprising 101 and 108 items were promulgated on 21 Aug 2020 and 31 May 2021 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. The initiative has been welcomed by the Indian Industry.        

Positive Indigenisation Lists comprise defence equipment which will be designed, developed and manufactured over a period from 2020 to 2025. Therefore, it will not be possible to assess actual savings at this juncture. However, as per available projections, it is estimated that over three and a half lakh Crores worth of equipment included in the Positive Indigenisation Lists will be ordered from Indian Vendors between 2020 to 2028.

The Positive Indigenisation Lists comprise not just of simple equipment but also some high technology weapon systems like Artillery Guns, Wheeled Armoured Fighting Vehicles, Light Combat Aircraft, Light Combat Helicopters, next Generation Missile Vessels & Corvettes, Land based High Power Radars, Land based Short Range Surface to Air Missiles, various types of Software Defined Radios, etc.

Focus has also been given to indigenisation of ammunition, which is a recurring requirement. Initiatives to promote indigenisation are likely to result in number of spinoffs; the major one being transformation of Indian Military from Buyers’ to Builders’ in respect of indigenous Defence production, and as a nation, from ‘Importer to Exporter’ of defence systems. The defence production sector is likely to emerge as one of the key contributors to nation’s economy as well as creation of numerous job opportunities. For instance, setting up of the two defence corridors, one each in Uttar Pradesh and Tamil Nadu, aims to generate employment in coming years. Positive Indigenisation lists are promulgated periodically by MoD by obtaining and collating inputs from all stakeholders, viz. Services, DRDO, DDP and Private Industry.

17-Dec-2021: Equipment Produced Under ‘Make In India’ Initiative

Many significant projects including 155mm Artillery Gun system ‘Dhanush’,  Light Combat Aircraft ‘Tejas’, ‘Akash’ Surface to Air Missile system, INS Kalvari, INS Khanderi, INS Chennai, Anti-Submarine Warfare Corvette (ASWC), Arjun Armoured Repair and Recovery Vehicle, Bridge Laying Tank, Landing Craft Utility, Bi-Modular Charge System (BMCS) for 155mm Ammunition, Medium Bullet Proof Vehicle (MBPV), Lakshya Parachute for Pilotless Target Aircraft, Thermal Imaging Sight Mark-II for T-72 tank,  Offshore Surveillance Ship, Water Jet Fast Attack Craft, Inshore Patrol Vessel, Offshore Patrol Vessel, Fast Interceptor Boat, 25 T Tugs, etc. have been produced in the country under ‘Make in India’ initiative of the Government in last few years.

The Government has taken several policy initiatives and brought reforms to promote self-reliance in defence manufacturing. These policy initiatives are aimed at encouraging indigenous design, development and manufacture of defence equipment in the country, thereby reducing dependency on imports in long run. Important policy initiatives and reforms are as under:

1. DPP-2016 has been revised as Defence Acquisition Procedure (DAP)- 2020, which is driven by the tenets of Defence Reforms announced as part of ‘Aatmanirbhar Bharat Abhiyan’.
2. In order to promote indigenous design and development of defence equipment ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ category has been accorded top most priority for procurement of capital equipment.
3. Ministry of Defence has notified two ‘Positive indigenisation lists’ of total 209 items for which there would be an embargo on the import beyond the timeline indicated against them. This is a big step towards self-reliance in defence. This would offer a great opportunity to the Indian defence industry to manufacture these items using their own design and development capabilities to meet the requirements of the Armed Forces.
4. The ‘Make’ Procedure of capital procurement has been simplified. There is a provision for funding upto 70% of development cost by the Government to Indian industry under Make-I category. In addition, there are specific reservations for MSMEs under the ‘Make’ procedure.
5. Procedure for ‘Make-II’ category (Industry funded), introduced in DPP-2016 to encourage indigenous development and manufacture of defence equipment has number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry/individual etc. So far, 60 projects relating to Army, Navy & Air Force, have been accorded ‘Approval in Principle’.
6. The Government of India has enhanced FDI in Defence Sector up to 74% through the Automatic Route for companies seeking new defence industrial license and up to 100% by Government Route wherever it is likely to result in access to modern technology.
7. An innovation ecosystem for Defence titled Innovations for Defence Excellence (iDEX) has been launched in April 2018. iDEX is aimed at creation of an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and Academia and provide them grants/funding and other support to carry out R&D which has potential for future adoption for Indian defence and aerospace needs.
8. An indigenization portal namely SRIJAN has been launched in August 2020 for DPSUs/Services with an industry interface to provide development support to MSMEs/Startups/Industry for import substitution. So far, 16445 Defence items, which were earlier imported, have been displayed on the portal.  The Indian industry have shown their interest in 3559 items. Out of them, 342 have already been indigenized.
9. “Offset portal” has been launched in May 2019 to ensure greater transparency, efficiency and accountability in the process. Reforms in Offset policy have been included in DAP 2020, with thrust on attracting investment and Transfer of Technology for Defence manufacturing, by assigning higher multipliers to them.
10. Government has notified the ‘Strategic Partnership (SP)’ Model in May 2017, which envisages establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, wherein they would tie up with global Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.
11. Government has notified a ‘Policy for indigenisation of components and spares used in Defence Platforms’ in March 2019 with the objective to create an industry ecosystem which is able to indigenize the imported components (including alloys & special materials) and sub-assemblies for defence equipment and platform manufactured in India.
12. Government has established two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu to attract total investments of Rs 20,000 Cr in the two Defence corridors by year 2024. So far, investment worth Rs 3600 Cr have been made in both the corridors by public as well private sector companies. Moreover, the respective State Governments have also published their Aerospace & Defence Policies to attract private players as well as foreign companies including Original Equipment Manufacturers (OEMs) in these two corridors.
13. An Inter-Governmental Agreement (IGA) on “Mutual Cooperation in Joint Manufacturing of Spares, Components, Aggregates and other material related to Russian/Soviet Origin Arms and Defence Equipment” was signed in September 2019. The objective of the IGA is to enhance the After Sales Support and operational availability of Russian origin equipment currently in service in Indian Armed Forces by organizing production of spares and components in the territory of India by Indian Industry by way of creation of Joint Ventures/Partnership with Russian Original Equipment Manufacturers (OEMs) under the framework of the “Make in India” initiative.
14. Defence Products list requiring Industrial Licences has been rationalised and manufacture of most of parts or components does not require Industrial License. The initial validity of the Industrial Licence granted under the IDR Act has been increased from 03 years to 15 years with a provision to further extend it by 03 years on a case-to-case basis.
15. Defence Investor Cell (DIC) has been created in Feb-2018 in the Ministry to provide all necessary information including addressing queries related to investment opportunities, procedures and regulatory requirements for investment in the sector. As on 31st Oct 2021, 1257 queries had been received and addressed by DIC.

13-Dec-2021: Manufacturing of Indigenous Defence Equipments

The Government has taken several policy initiatives and brought in reforms to encourage indigenous design, development and manufacture of defence equipment in the country, thereby reducing dependence on imports in the coming years. 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; Liberalisation 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 to India), Order 2017; Launch of an indigenization portal namely SRIJAN to facilitate indigenization 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.

In the last three years i.e., 2018-19 to 2020-21, the Government has accorded Acceptance of Necessity (AoN) for 119 proposals worth Rs 214,255.65 crore approximately, under ‘Buy (Indian-Indigenously Designed, Developed & Manufactured (IDDM)’, ‘Buy (Indian)’, ‘Buy and Make (Indian)’, ‘Make’, ‘SP Model’, ‘Buy & Make’ categories of capital acquisition.

19-Jul-2021: Boosting Indigenous Capabilities in Defence Production

The Government has taken several policy initiatives and brought in reforms to promote indigenisation and self-reliance in defence manufacturing, under AatmaNirbhar Bharat Mission in the defence sector. Important policy initiatives are as under:-

• Ministry of Defence has notified a ‘First Positive Indigenisation list’ of 101 items on 21st August, 2020 and ‘2nd Positive Indigenisation list’ of 108 items on 31st May, 2021 for which there would be an embargo on the import beyond the timelines indicated against them. This is a big step to promote indigenisation in defence sector. This offers a great opportunity to the Indian defence industry to manufacture these items using their own design and development capabilities to meet the requirements of the Indian Armed Forces. These lists includes some high technology weapon systems like artillery guns, assault rifles, corvettes, sonar systems, transport aircrafts, light combat helicopters (LCHs), radars, wheeled armoured platform, rockets, bombs, armoured command post vehicle, armoured dozer and many other items to fulfill the needs of our Defence Services.
• SRIJAN portal to promote indigenisation was launched on 14 August, 2020. As on date, 10,929 items, which were earlier imported, have been displayed on the portal for indigenisation. The Indian industry has shown interest for 2,890 displayed items so far. DPSUs/OFB are interacting with these industries to facilitate indigenisation of the items as per extant procedures.
• 1,776 components & spares have been indigenised in the year 2020-21 as a result of efforts of indigenisation by DPSUs, OFB & SHQs through their own process of indigenisation (In-house, Make-II & Other than Make-II).
• DPP-2016 has been revised as Defence Acquisition Procedure (DAP)-2020, which is driven by the tenets of Defence Reforms announced as part of ‘AatmaNirbhar Bharat Abhiyan’.
• In order to promote indigenous design and development of defence equipment ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ category has been accorded top most priority for procurement of capital equipment.
• The ‘Make’ Procedure of capital procurement has been simplified. There is a provision for funding up to 70% of development cost by the Government to Indian industry under Make-I category. In addition, there are specific reservations for MSMEs under the ‘Make’ procedure.
• Procedure for ‘Make-II’ category (Industry funded), introduced in DPP-2016 to encourage indigenous development and manufacture of defence equipment has number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry/individual etc. So far, 58 projects relating to Army, Navy & Air Force, have been accorded ‘Approval in Principle’.
• FDI: The Government of India has enhanced FDI in Defence Sector up to 74% through the Automatic Route for companies seeking new defence industrial license and up to 100% by Government Route.
• An innovation ecosystem for Defence titled ‘Innovations for Defence Excellence (iDEX)’ has been launched in April, 2018. iDEX is aimed at creation of an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, startups, individual innovators, R&D institutes and academia and provide them grants/funding and other support to carry out R&D which has potential for future adoption for Indian defence and aerospace needs.
• Reforms in Offset policy have been included in DAP-2020, with thrust on attracting investment and Transfer of Technology for Defence manufacturing, by assigning higher multipliers to them.
• Government has notified the ‘Strategic Partnership (SP)’ Model in May, 2017, which envisages establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, wherein they would tie up with global Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.
• Government has notified a ‘Policy for indigenisation of components and spares used in Defence Platforms’ in March 2019 with the objective to create an industry ecosystem which is able to indigenise the imported components (including alloys & special materials) and sub-assemblies for defence equipment and platform manufactured in India.
• Government has established two Defence Industrial Corridors, one each in the States of Uttar Pradesh and Tamil Nadu. The investments of Rs 20,000 crore are planned in Defence corridors of Uttar Pradesh and Tamil Nadu by year 2024. The progress is reviewed regularly at apex level. So far, investment of approx. Rs 3,342 crore have been made in both the corridors by public as well private sector companies. Moreover, the respective State Governments have also announced their Aerospace & Defence Policies to attract private players as well as foreign companies including Original Equipment Manufacturers (OEMs) in these two corridors.
• An Inter-Governmental Agreement (IGA) on ‘Mutual Cooperation in Joint Manufacturing of Spares, Components, Aggregates and other material related to Russian/Soviet Origin Arms and Defence Equipment’ was signed in September 2019. The objective of the IGA is to enhance the After Sales Support and operational availability of Russian origin equipment currently in service in Indian Armed Forces by organising production of spares and components in the territory of India by Indian Industry by way of creation of Joint Ventures/Partnership with Russian Original Equipment Manufacturers (OEMs) under the framework of the ‘Make in India’ initiative.
• Defence Products list requiring Industrial Licences has been rationalised and manufacture of most of parts or components does not require Industrial License. The initial validity of the Industrial Licence granted under the IDR Act has been increased from 03 years to 15 years with a provision to further extend it by 03 years on a case-to-case basis.
• Department of Defence Production has notified 46 items under the latest Public Procurement Order 2017 notified by Department for Promotion of Industry and Internal Trade (DPIIT), for which there is sufficient local capacity and competition and procurement of these items shall be done from local suppliers only irrespective of the purchase value.
• Defence Investor Cell (DIC) has been created in Feb-2018 the Ministry to provide all necessary information including addressing queries related to investment opportunities, procedures and regulatory requirements for investment in the sector. As on date, 1,176 queries had been received and addressed by Defence Investor Cell.
• Technology Development Fund (TDF) has been created under DRDO to promote self-reliance in Defence Technology through participation of Public/Private industries especially MSMEs and startups.
• For the year 2021-22, the allocation for domestic procurement has been enhanced compared to previous years and is about 64.09% i.e. Rs 71438.36 crore of the allocated amount for military modernisation.

22-Mar-2021: Proposals for indigenous designing and manufacturing of defence system

Defence Acquisition Procedure (DAP)-2020 envisages the basic tenets of ‘Aatmanirbhar Bharat Abhiyan’ and encourages indigenous designing and manufacturing of defence items.  The proposals for indigenous design and manufacturing are considered under ‘Make’ Procedure of DAP-2020.  The ‘Make’ Procedure aims to achieve the objective of self-reliance by involving greater participation of Indian industries including private sector through following mechanisms:

Make-I (Government Funded): This involves design and development of equipment, systems, major platforms or upgrades thereof by the industry.  Ministry provides financial support upto 70% of prototype development cost or maximum Rs. 250 crores per Development Agency (DA).

Make-II (Industry Funded): This includes design & development and innovative solutions by Indian vendor, for which no Government funding is provided, but it has assurance of procurement on successful prototype development.

 As on date, there are 4 ongoing projects under Make-I category.  Further, 56 proposals have been accorded ‘Approval in Principal’ under Make-II category out of which 23 proposals have been accorded Acceptance of Necessity (AoN).  In addition, Defence Research and Development Organisation (DRDO) has also undertaken 233 projects during the past three years since 2018.  The projects include new defence equipment such as Cruise missile, Hypersonic missile, Anti-Ship missile, Extended Range Anti-Submarine Rocket, Mounted Gun System, Ammunitions, Electronic Warfare system, Radars, Torpedoes, High Endurance Autonomous Underwater Vehicles, etc. AoN has been accorded for 45 DRDO developed systems during last 03 years since 2018 for induction into Services.

Further, in order to promote indigenous design and development of defence equipment ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ category under DAP is accorded top most priority for procurement of capital equipment.

Ministry of Defence has notified a ‘Negative list’ of 101 identified items for which there would be an embargo on the import beyond the timeline indicated against them.  This is a big step towards self-reliance in defence. This offers a great opportunity to the Indian defence industry to manufacture these items   indigenously  and develop capabilities to meet the requirements of the Armed Forces.  This list includes some high technology weapon systems like artillery guns, assault rifles, corvettes, sonar systems, transport aircrafts, light combat helicopters (LCHs), radars etc. to fulfil the needs of our Defence Services.

Further, an indigenization portal namely SRIJAN has also been launched in August, 2020 for Defence Public Sector Undertakings (DPSUs)/Ordnance Factory Board (OFB)/Services with an industry interface to provide development support to MSMEs/Startups/Industry for import substitution.  As on date, 9370 Defence items, which were earlier imported, have been displayed on the portal.  The Indian industry has shown interest for 1864 displayed items so far. The items displayed on the SRIJAN Portal have well-structured description including specification, images, business volume etc.