India Working Towards Indigenous Defence Manufacturing Capability

Bengaluru: India is working towards progressively reducing dependency on foreign manufacturers and developing the defence capabilities indigenously. This was informed by Minister of State for Defence Dr Subhash Bhamre while addressing a seminar, jointly organised by the Indian Air Force (IAF) and Confederation of Indian Industry (CII), in New Delhi, recently.

Dr Bhamre further said, “We have included a new procurement category called the Buy Indian – IDDM (Indigenously Designed, Developed and Manufactured) category in the DPP [Defence Procurement Procedure]. This would be the most preferred category for procurement and it is expected to promote indigenously designed products and bring significant investment in defence R&D.”

Speaking of partnership with defence industry, Dr Bhamre informed, “The Government of India has been working on formulating a ‘Strategic Partnership’ model for creating capacity in the private industry on a long term basis.” The Government had constituted a task force with experts from various fields to recommend criteria and prescribe methodology for selection of Strategic Partners. The report submitted by the task force has been examined at length and Government shall be issuing the policy for selection of strategic partners shortly.

Alleviating concerns of the industry, the Minister said, the exchange rate variation protection has been made applicable for the Indian private sector at par with public sector undertakings for all categories of capital acquisitions. The preferential treatment given to DPSUs in excise duty/custom duty has been discontinued, as per the revised policy; all Indian industries (public and private) are subject to the same kind of exercise and custom duty levies. This would ensure a level playing field between the private and public sector. Another step that the Government has taken is to remove the custom duty exemption on import of defence equipment to encourage ‘Make in India’.

Chief of the Air Staff Air Chief Marshal B S Dhanoa, in his keynote address, said, “The modernisation plan of the IAF is being pursued with an aim to give impetus to ‘Make in India’ and to beef up the defence manufacturing base. We in IAF are keen to see that ‘Make in India’ initiative gets converted to a reality.”

Speaking about self-reliance the Air Chief Marshal B S Dhanoa said, a high degree of indigenisation has been achieved in the field of radars and all the radars planned for induction in future are from Indian firms. The IAF is completely self-reliant in the field of software applications and a number of projects are functioning successfully on software developed by Indian firms.

Private Sector Participation

Breaking new ground, the Defence Acquisition Council (DAC) under the Chairmanship of the Minister of Defence, Arun Jaitley, recently finalised the broad contours of a policy aimed at engaging the Indian private sector in the manufacture of high-tech defence equipment in India.  The policy is aimed at developing the defence industrial eco-system in the country through the involvement of both the major Indian corporates as well as the MSME sector.

 

The policy, which was developed through extensive stakeholder consultations with Indian industry, envisages the establishment of long-term strategic partnerships with qualified Indian industry majors through a transparent and competitive process wherein the Indian industry partners would tie up with global OEMs to seek technology transfers and manufacturing know-how to set up domestic manufacturing infrastructure and supply chains.  The policy will give a boost to the ‘Make in India’ policy in the Defence sector and set Indian industry on the path to acquiring cutting-edge capabilities which will contribute to the building of self-reliance in the vital sector of national security requirements.

 

The policy is expected to be implemented in a few selected segments to begin with, namely, fighter aircraft, submarines and armoured vehicles.  In future, additional segments may be added.  Appropriate institutional mechanisms will be set in place to implement the policy.

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