To make the Indian defence industry self-reliant and boost indigenisation, the Ministry of Defence banned the import of 101 items on Sunday.
The MoD has also bifurcated the capital procurement budget for 2020-21 between domestic and foreign capital procurement routes. A separate budget head has been created with an outlay of nearly Rs 52,000 crore for domestic capital procurement in the current financial year.
With the latest embargo on import of 101 items, it is estimated that contracts worth almost Rs 4 lakh crore will be placed upon the domestic industry within the next five to seven years. Of these, items worth almost Rs 1.3 lakh crore each are anticipated for the Army and the Air Force while items worth almost Rs 1.4 lakh crore are anticipated by the Navy over the same period.
Defence Minister Rajnath Singh said, “The Ministry of Defence is now ready for a big push to the Atmanirbhar Bharat initiative. MoD will introduce an import embargo on 101 items beyond the given timeline to boost indigenisation of defence production.”
The minister pointed out that the decision to ban import of 101 defence items came after Prime Minister Narendra Modi had given a clarion call for a self-reliant India.
Modi in his address to the nation on May 12 called for a self-reliant India based on the five pillars, i.e., economy, infrastructure, system, demography and demand and announced a special economic package for a self-reliant India named ‘Atmanirbhar Bharat’.
Taking a cue from that, the Department of Military Affairs (DMA) and the Ministry of Defence (MoD) prepared a list of 101 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.
It also offers a great opportunity to the Indian defence industry to rise to the occasion to manufacture the items in the negative list using their own design and development capabilities or by adopting the technologies designed and developed by the Defence Research and Development Organisation (DRDO) to meet the requirements of the armed forces in the coming years.
“The list was prepared by MoD after several rounds of consultations with all stakeholders, including the Army, Air Force, Navy, DRDO, defence public sector undertakings (DPSUs), Ordnance Factory Board (OFB) and private industry to assess current and future capabilities of the Indian industry for manufacturing various ammunition /weapons /platforms /equipment within India,” the MoD said in a statement.
Almost 260 schemes of such items were contracted by the three services at an approximate cost of Rs 3.5 lakh crore between April 2015 and August 2020.
The list of 101 embargoed items comprises of not just simple parts but also some high technology weapon systems like artillery guns, assault rifles, corvettes, sonar systems, transport aircraft, light combat helicopters (LCHs), radars and many other items to fulfil the needs of the defence services.
The list also includes wheeled armoured fighting vehicles (AFVs) with indicative import embargo date of December 2021, of which the Army is expected to contract almost 200 at an approximate cost of over Rs 5,000 crore.
Similarly, the Navy is likely to place demands for submarines with indicative import embargo date of December 2021, of which it expects to contract about six at an approximate cost of almost Rs 42,000 crore.
For the Air Force, it was decided to enlist the LCA MK 1A with an indicative embargo date of December 2020. Of these, 123 are anticipated at an approximate cost of over Rs 85,000 crore.
The embargo on imports is planned to be progressively implemented between 2020 and 2024.
The aim behind promulgation of the list is to apprise the Indian defence industry about the anticipated requirements of the armed forces so that they are better prepared to realise the goal of indigenisation.
The MoD has adopted many progressive measures to encourage and facilitate ‘ease of doing business’ by the defence production entities.
All necessary steps would be taken to ensure that timelines for production of equipment as per the Negative Import List are met, which will include a coordinated mechanism for handholding of the industry by the defence services.
“More such equipment for import embargo would be identified progressively by the DMA in consultation with all stakeholders. A due note of this will also be made in the Defence Acquisition Procedure (DAP) to ensure that no item in the negative list is processed for import in the future,” the ministry said.