Friday, 17 May, 2024
India has been taking sincere efforts to provide a boost to its defence industry and bring Aatmanirbharta in defence. Image Source: IANS
The DAC has granted AoN permission to purchase latest generation anti-tank mines with seismic sensors and remote deactivation along with extra safety measures under the Buy {Indian-Indigenously Designed, Developed and Manufactured (IDDM)} category
The Defence Acquisition Council (DAC), under the chairmanship of Raksha Mantri Shri Rajnath Singh, accorded approval for Acceptance of Necessity (AoNs) for various capital acquisition proposals amounting to Rs 84,560 crore. The DAC has granted AoN permission to purchase latest generation anti-tank mines with seismic sensors and remote deactivation along with extra safety measures under the Buy {Indian-Indigenously Designed, Developed and Manufactured (IDDM)} category. To improve the Mechanised Forces' ability to engage targets beyond visual line of sight and increase operational efficiency, the AoN has been granted procurement authority for the Canister Launched Anti-Armour Loiter Munition System under the Buy (Indian-IDDM) category.
Active Towed Array Sonar, which can operate at low frequencies and different depths for long-range detection of adversary submarines, has been approved for purchase under the Buy (Indian) category by the AoN in order to keep the Indian Naval Ships one step ahead of the threats posed by the adversaries. Additionally, the AoN has been awarded to purchase heavy weight torpedoes to improve the Kalvari Class submarines' ability to attack.
The Acceptance of Necessity (AoN) stage, which is the first in India's military procurement procedure, is where all DAC approvals are at. The purchase of 15 C-295 transport aircraft, nine for the Indian Navy and six for the Indian Coast Guard, was a significant approval.
The Defence Acquisition Procedure (DAP) 2020 has been amended with approval from the DAC regarding benchmarking and cost computation, payment schedule, procurement quantity, and other aspects in order to foster a supportive environment for defence start-ups and to encourage the procurement of Advanced technologies from start-ups and MSMEs developed under the Innovations for Defence Excellence (iDEX) and Technology Development Fund schemes.
India has been taking sincere efforts to provide a boost to its defence industry and bring Aatmanirbharta in defence. The value of defence production in the financial year 2022-23 has crossed the mark of Rs 1 lakh crore for the first time ever. “The current value of defence production in FY 2022-23 is a rise of more than 12 percent over FY 2021-22, when the figure was Rs 95,000 crore,” the defence ministry said in a statement. The ministry has been working actively to address issues and develop defence production in the nation in conjunction with defence industry and their organisations.
The inclusion of Micro, Small, and Medium Enterprises (MSMEs) and startups into the defence supply chain is one of the policy reforms the government has made, according to the ministry, to make doing business easier. According to the ministry, these policy changes have promoted active involvement from a range of businesses, including MSMEs and start-ups, in the design, development, and production of defence products.
The central government has also taken a number of steps for the promotion of MSMEs in the defence sector. Defence procurement worth Rs 5,463.82 crore was procured from the MSMEs in the year 2020-21. The value of defence procurement from MSMEs in 2019-20 was Rs 4,603.95 crore. During the last five financial years (2018-19 to 2022-23), 239 capital acquisition contracts have been signed for procurement of defence items/equipment. Out of which, 168 contracts accounting for 68 percent of total contract value have been signed with Indian vendors including MSMEs. Around Rs 500 crore have been sanctioned for Defence start-ups from 2021-22 to 2025-26.
The expenditure on defence procurement from foreign sources has reduced from 46 percent of overall expenditure in 2018-19 to 36.7 percent in December 2022.
Incentivised by various government reforms, India is quickly ramping up its manufacturing capacity. The Government of India has been focusing on making India a ‘defence exporting nation’ rather than a ‘defence importing nation.’
Source: Department of Defence Production, Ministry of Defence
The defence production in India has increased from Rs 74,064 crore in FY2016-17 to Rs 1,06,813 crore in FY2022-23. The Defence Public Sector Undertakings (DPSUs) continue to dominate the Indian defence market as they remain the largest manufacturers of defence equipment in India. DPSUs are followed by the private companies. In recent years, the government has also encouraged the private players to play an active role in defence manufacturing and production and make India Aatmanirbhar in defence sector.
In an effort to rank among the world's top makers of defence equipment, the Indian government unveiled a draft defence production policy in 2018. The policy intends to make India self-sufficient in 13 weaponry categories, including artillery, tanks, fighter aircraft, warships, and missiles, which are now among India's main defence imports. The goal of the policy is to combine innovations from private companies, the Defence Public Sector Undertaking, and the Ordnance Factory Board.
Additionally, it intends to create jobs for almost two to three million people by 2025 and export defence goods and services worth Rs 35,000 crores (USD 05 billion) by 2025. This will require an additional investment of nearly Rs 70,000 crores (USD 10 billion), or a turnover of Rs 1,70,000 crores (USD 26 billion) in aerospace and defence goods and services by 2025. In order to encourage the export of defence items overseas, it also seeks to establish a Defence Export Organisation (DEO).
Source: Department of Defence Production, Ministry of Defence
There was a decline in the defence production in 2018-19 and 2019-20. One of the major reasons was the covid-19 pandemic which resulted in the nationwide lockdown for a long period of time and also the disruption in supply chains. But the government once again ramped up its efforts to increase the defence production in India as this is evident from the figures of 2020-21.
Weapon Simulators, Tear Gas Launchers, Torpedo Loading Mechanisms, Alarm Monitoring & Control, Night Vision Monocular & Binocular, Light Weight Torpedo & Fire Control Systems, Armored Protection Vehicles, Weapons Locating Radar, HF Radio, Coastal Surveillance Radar, etc. are some of the major defence equipment exported over the past five years. At present, the exports are being made to more than 85 countries all over the world. Names of the countries cannot be divulged due to strategic reasons.
Government has taken various steps to improve Indian defence products and make them competitive globally. To achieve "Aatmanirbharta in Defence," the government has placed a focus on the indigenization of several defence products. The locally produced indigenous goods become globally cost competitive, and it also makes it easier for MSMEs to be integrated into the global supply chain. Regularly and without charge, the DRDO transfers new technologies to the industries. Industries have been provided free excess to DRDO patents. DRDO conducts Niche Technology Demonstrations by engaging industries. This provides a dual benefit by assisting industries with user inputs for product improvement and for self-testing and evaluation of their products in field conditions.
In an effort to provide a boost to the defense sector and increase the infusion of FDI, the government in September 2020 revised the regulations and permitted FDI under the automatic route up to 74 percent and 100 percent through the government route in any area, where it is likely to provide access to contemporary technologies. Recently, Sweden’s Saab became the first company which will be manufacturing the shoulder-fired rocket in Haryana, India with 100 percent FDI.
