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What is the News?
The Defence Ministry has notified the second negative import list of 108 items. These items can now only be purchased from indigenous sources as per Defence Acquisition Procedure (DAP) 2020. The list has now been renamed as the ‘positive indigenisation list’.
Note: The first positive indigenisation list of 101 Defence Items was announced in August 2020. This means that the second list takes the total number on the list to 209.
What does Positive Indigenisation List mean?
- Positive indigenisation list essentially means that the Armed Forces—Army, Navy, and Air Force—will only procure all of these 209 items from domestic manufacturers.
- The manufacturers could be private sector players or defense Public Sector Undertakings(DPSUs).
Why was the Positive Indigenisation List announced?
- India has been one of the largest importers of weapons in the world for over a decade.
- As per Stockholm International Peace Research Institute, India was the second-largest importer between 2014 and 2019. It imported weapons worth US$ 16.75 billion during this period.
- Hence, the government wants to reduce the dependence on imported items in defense.
- Further, the list encourages Indian Defence Industry to step up and manufacture the items mentioned in the Negative List for the needs of the forces.
- Moreover, the list is also in line with the government’s target to reach a turnover of USD 25 billion by 2025 through indigenously manufactured defence products
What does the Second Negative list contain?
- The second list lays special focus on weapons and systems which are currently under development/trials and are likely to translate into firm orders in the future.
- It comprises defence items such as complex systems, sensors, weapons and ammunition like helicopters, Airborne Early Warning and Control (AEW&C) systems among others.
Implementation of the List:
- Firstly, this second negative list is planned to be implemented progressively with effect from December 2021 to December 2025.
- Secondly, the government of India has also bifurcated the capital procurement budget for 2020-21. It is between domestic and foreign capital procurement routes.
- Out of Rs 1.35 lakh crore allocated for capital acquisition for defence in this year’s budget, the government has reserved more than 60% for domestic procurement.
Source: The Hindu
