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The ‘Make in India’ Factor in Defence Manufacturing

With continued focus on defence procurement and bringing MSMEs in Defence Procurement, imports from foreign sources has reduced from 46% to 36%, this was informed by Shri Ajay Bhatt, MoS of Ministry of Defence.

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The Government has taken several policy initiatives in the past few years under ‘Make in India’ program and brought in reforms to encourage indigenous design, development and manufacture of defence equipment in the country, thereby reducing import of defence equipment.

These initiatives, inter-alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020;  Announcement of 18 major defence platforms for industry led design & development; Notification of  two ‘Positive Indigenisation Lists’ of total 209 items of Services and  two ‘Positive Indigenisation List’ of total 2851 items and 107 Line Replaceable Units (LRUs) of Defence Public Sector Undertakings (DPSUs), for which there would be an embargo on the import beyond the timelines indicated against them; Simplification of Industrial licensing process with longer validity period; Liberalisation of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route; Simplification of Make Procedure; Launch of Innovations for Defence Excellence (iDEX) scheme involving start-ups & Micro, Small and Medium Enterprises (MSMEs); Implementation of Public Procurement (Preference to Make in India) Order 2017; Launch of an indigenization portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs; Reforms in Offset policy with thrust on attracting investment and Transfer of Technology for Defence manufacturing by assigning higher multipliers; and Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu.

With these actions of the Government, the expenditure on defence procurement from foreign sources has reduced from 46% to 36%, thereby reduced import burden in the last 3 (three) years i.e., 2018-19 to 2020-21.

This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Smt Roopa Ganguly in Rajya Sabha on March 28, 2022

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