Defence Minister approves 'indigenisation list' to promote domestic defence industry

Tags: Defence

Defense Minister Rajnath Singh on August 28 approved a fresh list of 780 components and sub-systems that will be procured from the domestic industry after restrictions on their imports under a time-frame of about six years.

IMPORTANT FACTS -

• This step has been taken to promote self-reliance in defence manufacturing and to reduce imports by Defence Public Sector Undertakings (DPSUs).

• The Defence Ministry has set a specific time frame for the import ban of goods in the period from December 2023 to December 2028.

• This list is in continuation of two similar positive lists brought out in December 2021 and March 2022.

• Indigenization of these items will be done through various routes under 'Make' category.

• The 'Make' category aims at achieving self-reliance by involving greater participation of Indian industry in defence manufacturing.

• Projects related to the design and development of equipment, systems, major platforms or their upgrades by the industry can be taken up under this category.

• Indigenous development of these items will boost the economy and reduce the import dependence of DPSUs.

• DPSUs will soon issue Expression of Interest (EoI) and Request for Proposal (RFP).

ADDITIONAL INFORMATION -

What is a positive indigenization list ?

• A positive indigenization list means that the armed forces will procure the listed items only from domestic manufacturers.

• Manufacturers can be private sector players or Defence Public Sector Undertakings (DPSUs).

Govt Initiatives for indigenisation in defence sector :

• The Foreign Direct Investment (FDI) limit under the automatic route in the defence sector has been increased from 49% to 74%.

• In October 2021, the government dissolved the four-decade-old Ordnance Factory Board (OFB) and merged 41 factories of seven new state-owned companies to manufacture defence hardware ranging from munitions to heavy weapons and vehicles.

• India has inaugurated two defence industrial corridors, one in Tamil Nadu and the other in Uttar Pradesh, to promote the flagship "Make in India" programme.

• According to an estimate, the Indian Armed Forces are projected to spend around USD 130 billion in capital procurement over the next five years.