Defence import bans linked to domestic manufacturing

Source: The post is based on the article “Defence import bans linked to domestic manufacturing” published in Livemint on 30th August 2022.

What is the News?

Defence Minister has approved the third Positive Indigenisation List(PIL) of 780 strategically important Line Replacement Units(LRUs), sub-systems and components. There is a timeline beyond which they will only be procured from the domestic industry. 

What is a Positive Indigenisation List(PIL)?

Positive indigenisation list essentially means that the Armed Forces—Army, Navy, and Air Force—will only procure all of these items from domestic manufacturers after the timelines indicated in the list.

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What are the benefits of Positive Indigenisation?

The indigenous development of these items will bolster the economy, reduce the import dependence of DPSUs, help harness design capabilities of the domestic defence industry and position India as a leader in these technologies.

What are the steps taken by the government to boost indigenisation in defence? Government has taken several steps in recent years to boost self-reliance, including:

– Liberalization of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route; 

– Creating a separate budget for buying locally made military hardware 

– Notifying lists of weapons, equipment and sub-systems that cannot be imported.

– Launch of Innovations for Defence Excellence (iDEX) scheme involving start-ups & Micro, Small and Medium Enterprises (MSMEs); 

– Launch of an indigenisation 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.