By Sanya Saxena
The Government of India has implemented various policy initiatives under the ‘Make in India‘ programme, including tectonic reforms to stimulate local design, development, and manufacture of defence equipment, thereby reducing defence equipment imports. In the recent past rapid strides have been taken that is showing quantifiable impact in the defence sector.
Focus of Make in India schemes in a Blink~ For ‘Ease of Doing Business’
· Facilitating MSMEs: The capability and viability of the defence and aerospace industry is built on the strength of supply chains, in which the MSMEs are intricately intertwined. A large number of MSMEs across the country are supplying components and systems ranging from nuts and bolts to networks. The Government is focusing on providing unique benefits to MSMEs through well directed programmes and schemes that facilitate availing benefits of offsets, a special Make – III Procedure, and procurement reservation through the GeM portal etc. At various levels, interactions with suppliers and stakeholders are held regularly to better understand their challenges and make decisions to resolve their concerns at the level of the Government.
Test Facilities for Private Sector: In order to facilitate the Indian private industry for testing/ trials, proof firing, the Government has offered the test facilities/ Field firing ranges available with OFB, DPSUs, DRDO,SHQ(Army), SHQ(Navy), SHQ(Air Force) to the private industry. This is huge benefit for the industry as the cost of testing and access to such infrastructure has been reduced to a bare minimum.
IP Facilitation: Intellectual property rights (IPR) are becoming more widely recognised as a strategic corporate instrument for improving industrial competitiveness. Globalization is causing geographical barriers to trade between nations to crumble. To safeguard their intellectual property, a variety of IPR tools have been adopted. To help un ravel these complicated transactions, a specialised IPF Cell has been set up to provide essential guidance and advice on IPRs such as patents, trademarks, and copyrights, as well as services such as IP protection, IP awareness and training, and counselling.
Import Facilitation: In order to build up capability of the Indian Industry in the defence platforms/systems, for the purpose of development of prototypes and re-engineering of items of defence applications, number of components are required to be imported by Indian industry. Several schemes have been devised to provide the necessary framework to facilitate minimally required imports.
Export Facilitation: Department of Defence Production (DDP) is the competent authority to issue “Authorization” for the export of munitions list items i.e. Items mentioned in category 6 of SCOMET List and for the export of items specifically designed for military purposes. The entire procedure is now fast tracked and it is possible to obtain an export approval within a matter of days. This has also helped Indian OEMs to bid for complete platforms and systems in international tenders. The recent export of the Indian built supersonic missile, BrahMos, is an exemplary success story of coordinated action between the various ministries and department of the Government of India.
Quality Assurances initiatives: Directorate General of Quality Assurance (DGQA) and Directorate General of Aeronautical Quality Assurance (DGAQA) are the primary agencies under Department of Defence Production (DDP), which are entrusted to ensure quality assurance of the defence items. They have provided easy facilitation and are now breaking new ground in working with the development agencies to bring in quality at the design level itself.
Industrial Licenses: Prior to 2001, manufacturing in defence sector was limited to public sector companies only. In 2001, the Government allowed 100% participation by Indian private sector in defence manufacturing subject to licensing. Today more than 500 industrial licences have been issued for the manufacture of various platforms and systems. Further liberalisation has been effected by removing all detailed parts components and sub-systems from the licencing regime.
The indigenisation policy’s goal is to develop an industry ecosystem capable of substituting imported components (including alloys and special materials) and sub-assemblies for defence equipment and platforms made in India products. These are also potential items of exports to third countries using the same or similar equipment. By 2022, Defence PSUS is expected to have reduced the import cost by more over Rs 15000 Cr by indigenizing products and processes.
Under this initiative, the Ministry of Defence has agreed to post 176 de-reserved commodities that are regularly acquired by the Armed Forces on the GeM platform in order to smoothen business operations and procurement efficiency. There are 93 goods required by the Ordnance Factories and 93 items required by the Indian Air Force and Indian Navy. On the GeM portal, 89 personnel comfort items for the Indian Navy and Air Force, as well as 52 non-core list of goods from the Ordnance Factory Board are already published.
More recently under the Make I provisions of the DAP 2020 Government have released a list of 18 major defence platforms/equipment for Indian industry led m sign & development. 4 of them have already been accorded approval in principle whilst the balance are undergoing feasibility studies.
Similarly the launch of Innovations for Defence Excellence (iDEX) scheme (involving start-ups & MSMEs) and an indigenization portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs have already seen great success such as the swarm drone technology and other difficult systems. Such reforms combined with the thrust on attracting investment in the two Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu are likely to reap rich dividends for the national aero and defence industrial ecosystem.
Impact
In the past three years i.e. from 2018-19 to 2020-21, the Government’s expenditure on defence purchases from foreign sources has decreased from 46 percent to 36 percent. Thus, it lowered the import load. Furthermore, during 2019-20 and 2020-21, the value of production of public and private sector defence companies increased from Rs. 79,071 crore to Rs. 84,643 crore which is indiacative of the growing share of Indian content in the arsenal of the Indian Armed Forces . The Government has also earmarked 25% of DRDO budget for promoting R&D by industry. Almost 58% of capital procurement are being sourced from domestic industry and this will rise further with the announcement of the third positive list of negative imports announced recently.
These initiatives are charting India’s path to be atma nirbhar in defence equipment which augurs well for the Indian Armed Forces and the industry. However, national secuirty must not be compromised through delays in induction of hi-tech equipment which exposes vulnerabilities to adversaries to exploit.