$27.7 Bn Push For Domestic Arms Industry With India’s 3rd Negative Import List
India on April 7 promulgated a third ‘Positive Indigenisation List’ – or a Negative Import List – of 101 items of high-end Defence equipment, the latest in a series of moves to end arms imports by building a credible Military Industrial Complex.
The 3rd Indigenisation List released by Defence Minister Rajnath Singh takes the total number of items barred for import to 310, and includes platforms like the Naval Utility Helicopters (NUH), Medium Altitude Long Endurance (MALE) UAVs, Light Weight Tanks and unmanned underwater vehicles.
It also includes high-end sensors like the Multi-Function Surveillance, Track and Guidance Radar (MFSTAR) – the AESA radar installed on new generation Indian Naval platforms, including its latest destroyers.
Missile systems including Submarine-launched anti-ship cruise missiles, ship-based Medium-Range Surface-to-Air Missiles (MRSAM) and air and ship-launched Medium-range anti-ship naval missiles are also on the Imports ban list, which includes a range of high-end ammunition and weaponry.
“These weapons and platforms are planned to be indigenised progressively with effect from December 2022 to December 2027,” the Ministry of Defence stated, adding that “these 101 items will, henceforth, be procured from local sources as per provisions of Defence Acquisition Procedure (DAP) 2020.”
As per Industry estimates, more than ₹ 2,10,000 Cr ($27.7 Billion) worth of orders for Defence equipment would be placed on Indian Industry in the next five to seven years as a consequence of the issuance of the Indigenisation Lists.
“Today’s development follows issue of first list (101) and second list (108) that were promulgated on August 21, 2020 and May 31, 2021 respectively. Import substitution of ammunition which is a recurring requirement has been given special emphasis. The spirit behind issuing these three lists comprising 310 defence equipment, slated to be manufactured locally, reflects the growing confidence of the Government in the capabilities of domestic industry that they can supply equipment of international standards to meet the demand of the Armed Forces,” the Ministry of Defence stated.
Defence Minister Rajnath Singh clarified that rapid moves towards indigenisation of Defence equipment did not mean that India was shutting its doors to global arms companies. “Even under ‘Aatmanirbhar Bharat Abhiyan’ (campaign for self-reliant India), we have provisions which provide suitable opportunities and environment to foreign companies to invest, collaborate, set up joint ventures and earn profit,” he said. Government policy was aimed at creating an environment for the public and private sectors and foreign entities to work together to help India become one of the world's leading countries in defence manufacturing, the Minister assured.
He expressed optimism that the new list will prove crucial in the development of domestic industrial capability and take India’s Research & Development and manufacturing capacity to a higher level. He attributed the far-reaching moves for indigenisation to Prime Minister Narendra Modi’s vision of ‘Aatmanirbhar Bharat’.
The Defence Minister assured Industry that the time limit given in the Indigenisation Lists will also be adhered to. All necessary steps, including handholding of the industry by the armed forces, will be taken to support Industry deliver on the Indigenisation agenda.
“This third positive indigenisation list has been prepared after in-depth consultations with all stakeholders, such as Defence Research & Development Organisation (DRDO), Department of Defence Production (DDP), Service Headquarters (SHQs) and the private industry,” the Ministry of Defence stated.
Industry hailed the move. The Third Positive Indigenisation List comes at a strategically important time. Given the current geopolitical scenario, the importance of being self-reliant in defence production is more apparent than ever and the Industry is well poised to manufacture the 101 items indigenously and enhance the operational readiness of our forces,” said SP Shukla, president of CII’s Society of Indian Defence Manufacturers.
The sentiment was hailed by Defence major L&T’s Jayant Patil, an Industry leader and former president of SIDM. “Third Positive Indigenisation List reaffirms Government of India’s unwavered trust on the capability of the Indian Defence Industry. The three lists provide a shot in the arm to the domestic Defence Industry to realise the Aatmanirbhar Vision of our Prime Minister, build a strong India and attain strategic independence in foreign policy - a much desired aim for all Nations in the current global geopolitical situation,” he stated.
Defence Minister Rajnath Singh also put the Defence Indigenisation efforts in the context of strategic autonomy and ending vulnerabilities which follow import dependence. “He stressed that import of systems, with foreign software codes, can prove to be dangerous for the security apparatus as it opens the window of vulnerability,” the Ministry of Defence stated.
The Minister also highlighted that import substitution of ammunition was a priority in the first two Indigenisation Lists, stressing that domestic production of ammunition ensures uninterrupted supply during wars.
On the occasion of the announcement of the Third Positive Indigenisation List, the Defence Research and Development Organisation (DRDO) signed 30 Transfer of Technology (ToT) agreements with 25 industries. The Defence Minister handed over the agreements pertaining to 21 technologies developed by 16 DRDO laboratories.
These technologies include Quantum Random Number Generator (QRNG), developed by a DRDO Young Scientist Lab (DYSL- QT, Pune), Counter Drone System, Laser Directed Energy Weapon System, Missile Warhead, High Explosive Materials, High Grade Steel, Specialised Materials, Propellants, Surveillance & Reconnaissance, Radar Warning Receivers, CBRN UGVs, Mine Barriers, Fire Fighting Suits and Anti-Mine Boots.
So far, the DRDO has entered into more than 1,430 ToT agreements with Indian industry, of which 450 have been signed in last two years.
“This will further strengthen the manufacturing eco-system in defence systems and platforms,” the Minister said.
Minister of State for Defence Ajay Bhatt, Defence Secretary Ajay Kumar, Chief of the Air Staff Air Chief Marshal VR Chaudhari, Chief of the Naval Staff Admiral R Hari Kumar, Vice Chief of the Army Staff Lt Gen Manoj Pande, Secretary Department of Defence R&D and Chairman DRDO Dr G Satheesh Reddy were among the dignitaries present on the occasion.
