Indian Government Releases Third List Of Defence Items To Ban:
Defence minister Mr.Rajnath Singh on 8th April released the third list of 101 defence items to ban over the next 5 years to boost self-reliance in defence manufacturing. The list contains military systems and equipment such as sensors, patrol vessels,52 caliber mounted artillery gun systems, naval utility helicopters, weapons and ammunition, anti-radiation missiles, anti-ship missiles, etc.
After consultation with the Defence Research & Development Organization (DRDO), Service Headquarters (SHQs) and Department of Defence Production (DDP), The defence items banned for import have been identified. On 6th April, the defence ministry said in a statement that orders worth more than 2,10,000 crore are estimated to be placed in the next 5 years due to the release of the third list.
Mr.Rajnath Singh Releases Third list of Defence Items to Be Banned For Import:
To encourage local defence manufacturing under Atmanirbhar Bharat Campaign, Mr.Rajnath Singh released third positive indigenisation list of 101 defence equipment and platforms. Mr.Rajnath Singh mentioned that when orders for defence items are given to local defence manufacturing industries, it creates employment opportunities to lakhs of people working in Aerospace and defence manufacturing. The defense minister portrayed the third list as a “symbol of 360-degree efforts to achieve PM Modi’s vision of ‘Atma Nirbhar Bharat”.
Impact of Release of First and Second List of Defence Items To Be Banned:
The first list of 101 items had cruise missiles, short-range surface to air missiles, towed artillery guns, offshore patrol vessels, etc. This first positive indigenisation list was issued in August 2020.
Last year in May, The Indian government banned import of additional 108 military systems and weapons such as tank engines, radars, airborne early warning systems, and next generation corvettes for 4.5 years.
The Ministry of Defence said that, “contracts for thirty one projects worth more than INR 53,839 crore have been signed by the armed forces since the notification of the first and second lists. AON (Acceptance of necessity) for eighty three projects worth more than INR 1,77,258 crore has been accorded. Addition to it, in the next 5 to 7 years, cases worth INR 2,93,741 crore will be progressed”.
The Ministry of Defence hopes the positive indigenisation lists will encourage Research & Development (R&D) by attracting fresh investment into technology and defence items manufacturing.
DRDO to Strengthen Defence And Aerospace Manufacturing Industries:
DRDO has signed 30 Transfer of Technology (ToT) agreements with 25 industries to strengthen local manufacturing. Additionally, 16 DRDO laboratories have developed 21 technologies such as laser directed energy weapon system, quantum random number generator (QRNG), radar warning receivers, anti-mine boots, counter drone system, propellants, surveillance and reconnaissance, etc.
So far, DRDO has signed 1,430 ToT agreements with multiple Indian manufacturing industries, out of which 450 ToT agreements were signed in the last 2 years. By initiatives like this, the Indian government is providing strong support to local defence and aerospace manufacturing industries.
New Opportunities For Aerospace And Defence Manufacturing Industries:
- On 8th April, while releasing the 3rd positive indigenisation list, Rajnath Singh said 68% of the defence capital budget has been reserved for domestic procurement to support local defence manufacturing industries. Also, 25% of the defence R&D budget is earmarked for startups and academia.
- The Ministry of Defence has set a goal of USD 25 billion turnover in defence manufacturing in the next 5 years. The Indian armed forces are estimated to spend more than USD 130 billion in the next 5 years for capital procurement.
Government Initiatives to Support Defence And Aerospace Manufacturing Industries:
1. Defence Acquisition Procedure (DAP) 2020:
The Indian government formulated Defence Acquisition Procedure rules for procurement of innovative defence equipment and products to accelerate Make in India initiative. DAP includes guidelines such as higher usage of indigenous content, reservation of categories for Indian vendors, and indigenisation of design. Along with these, it concentrates on improving the ‘ease of doing business’ by not complicating the procedures to encourage foreign manufacturers to enter into defence and aerospace manufacturing.
2. Foreign Direct Investment (FDI):
To encourage foreign companies to invest in India, The Indian government allowed FDI not exceeding 74%. This results in reducing import dependency.
3. Import Embargo:
In 2020, The Indian government released a list of 101 defence items that were banned for import. Additional defence items were added in 2021. Totally 209 defence items were banned for import. These indigenisation lists boost “Atmanirbhar Bharat” campaign.
4. Technology Development Fund:
5. Increasing Budget Allocation To Boost Defence And Aerospace Manufacturing:
The Indian government allocated US$ 63 billion to encourage defence manufacturing in 2021. This is equivalent to 2.2% of India’s GDP and 14% of overall central government expenditure.
Some Key Trends Promoting Defence Manufacturing:
- Modernisation of Military
- Make in India initiative
- AK-203 Assault Rifles
- Predator Drones
- Foreign Collaboration
- Growth in Exports
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