In A Major Policy Thrust Defence Ministry Sets The Second List Of 108 Military Items Under Self-Reliance & Defence Exports

Defence Ministry today notified the 'second List' to boost indigenisation in the Defence sector. Defence Minister Rajnath Singh has approved a proposal of the Department of Military Affairs, Ministry of Defence (MoD) to notify the ‘Second Positive Indigenisation List’ of 108 items. 

The notification comes right after the ‘First Positive Indigenisation’ List comprising 101military items which was notified in August 2020. At that time, it was also highlighted that more such equipment would be identified progressively to facilitate and encourage defence manufacturing in the country. 

India is the  second largest import of defence equipment and in terms of export, India was ranked at the 23rd position as a global arms exporter by SIPRI in 2020.  

India’s defence exports has been growing at 35 per cent — from around Rs 2,000 crore to Rs 11,000 crore. In 2013-14, we were just about exporting worth Rs 1500 crores which turned out to be Rs. 11,000 crores of export now. Defence Export is the silver lining and hold immense potential for Indian Defence PSUs and emerging private industries.

Defence Ministry has set an ambitious defence exports target of Rs 35,000 crore by 2025. Indian defence industry is striving to become part of the global defence value chain and one of the leading countries in the defence sector.

This will give further boost to indigenisation with active participation of public and private sector for fulfilling the twin objectives of achieving self-reliance and promoting defence exports. All the 108 items will now be procured from indigenous sources as per provisions given in Defence Acquisition Procedure (DAP) 2020. 

Commenting on the MOD's List, Jayant D Patil, President, SIDM and Sr. Executive Vice President, L&T said: “The 2nd Positive Indigenisation List is another testament of the confidence placed by the Government and the Armed Forces on the Industry to deliver cutting-edge Defence Technology for India’s security requirements." Patil said the List is comprehensive with truly big-ticket items that will be built in India and a great boost to making India ‘aatmanirbhar’”.

ALH Dhruva,HAL, Bangalore ( Photo Credit- manish Jha/BW)

According the ministry, The second list (enclosed) lays special focus on weapons/systems which are currently under development/trials and are likely to translate into firm orders in the future.

Ministry official said: "Like the first list, import substitution of ammunition which is a recurring requirement has been given special focus. Not only does the list recognise the potential of local defence industry, it will also invigorate impetus to domestic Research &Development by attracting fresh investment into technology and manufacturing capabilities."

The ‘Second Positive Indigenisation List’ comprises complex systems, sensors, simulator, weapons and ammunitions like Helicopters, Next Generation Corvettes, Air Borne Early Warning and Control (AEW&C) systems, Tank Engines, Medium Power Radar for Mountains, MRSAM Weapon Systems and many more such items to fulfil the requirements of Indian Armed Forces.This second list is planned to be implemented progressively with effect from December 2021 to December 2025. 

This second list has been prepared by MoD after several rounds of consultations with government and private manufacturing industry confederations to assess future capabilities of Indian Industry which will be able to meet requirements of the Armed Forces. This list provides continuous impetus towards self-reliance in Defence.

Indian defence has grown rapidly strides in recent years and is well placed to take up initiatives for exporting defense equipment in the region. India has been exporting defence equpment but the rust is on the big ticket items like home grown military helicopters and fighter jets. In the past, India has already supplied Cheetal helicopters to Afghanistan, Dhruv Helicopters and bulletproof jackets to Nepal, Sukhoi 30 avionics and MIG spare parts to Malaysia, offshore patrol vessels to Mauritius among others.

Besides the government owned defence entities, Indian private defence industry has also staked in terms of offering advance military equipment and investment as well. 

In 2019-20, over 85 per cent of export authorisations were passeed on to private sector companies which is valued at more then Rs 8,000 crore. As of 2020, nearly 500 industrial licenses (ILs) have been issued to about 300 private sector companies. These licenses are valid to 15 years, and can be further extended for a period of three years. 

India's defence has grown exponentially to Rs 11000 cr within 4 years. 

There is a need to promote investment in the defence sector, both in R&D and production. While putting in place the policy framework and procedural mechanisms, the thrust would be on indigenous production and exploring possibilities of exports to other nations that may look forward to supplies from India. 

Since the defence technology needs long term investment, its obsolescence is high with low economies of scale. Hence, the policy of maximizing indigenous production without well supported R&D policy and export strategy may not bring desired results. Such List will be a force multiplier for our defence industry to invest further and scale up in terms of technology and production. Defence industrial policy has to be supplemented by the strategy for defence exports without which the economic base of the defence industry would be difficult to sustain in the present economic competitive environment. 

The Defence industry can gainfully utilise this golden opportunity to build robust Research and Development facilities, capacities and capabilities to meet the futuristic requirements of the Armed Forces. This list also provides an excellent opportunity for ‘start-ups’ as also MSMEs which will get tremendous boost from this initiative. 

In terms of financing such entities, Government through Ministry of External Affairs has been announcing  lines of credit for our defence.  

Ministry outlined that Defence Research and Development Organisation (DRDO) and Service Head Quarters (SHQs) will take all necessary steps, including hand holding of the Industry, to ensure that the timelines mentioned in the ‘Second Positive Indigenisation List’ are met, thereby facilitating an environment for Indian Defence Manufacturers to create world class infrastructure, assist in Government’s ‘Make in India’ vision to make India self-reliant in defence.  It aims to  develop the capabilities for defence export in the near future.The Second Positive Indigenisation List will soon be hosted in the MoD website.