Defence manufacturing is primarily driven by capital acquisition of defence equipment. Under ‘Make in India’ initiative of the Government, several measures have been taken to promote indigenous design, development and manufacture of defence equipment in the country by harnessing the capabilities of the public and private sector. These measures include according preference to procurement from Indian vendors under the Defence Procurement Procedure (DPP), liberalization of the licensing regime and FDI policy by raising the cap on FDI in the defence sector, simplification of export procedure, streamlining of defence offset guidelines etc. Recently, the Government has notified the ‘Strategic Partnership (SP)’ Model which envisages establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, wherein they would tie up with global Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.

In the last three financial years i.e., 2014-15 to 2016-17, the Government has accorded Acceptance of Necessity (AoN) for 105 proposals worth Rs.2,33,000 Crore approximately, in ‘Buy (Indian-Indigenously Designed & Developed Manufactured (IDDM)’, ‘Buy (Indian)’, ‘Buy and Make (Indian)’ and ‘Make’ categories of capital acquisition i.e. Request for Proposal (RFP) will be issued to Indian vendors only.

As on date, no in-house development project proposal approved by Ordnance Factory Board for development of small arms is pending for approval by Department of Defence Production.

This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Shri PR Senthil Nathan and Shri Bharathi Mohan RK in Lok Sabha today.

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The new Defence Procurement Procedure (DPP) 2016 containing the Preamble and 5 Chapters has been put on Ministry of Defence website on 28.03.2016. The new DPP focuses on a boost to the ‘Make in India’ -initiative of the Government of India, through Indigenous design, development and manufacturing of defence equipment, platforms & systems. The ‘Make’ procedure has been simplified to ensure increased participation of the Indian industry. Enhancing the role of MSMEs in defence sector, and cutting down permissible timeframes for various procurement activities, are the other defining features of DPP-2016.

The new category viz. Buy (Indian-IDDM) refers to the procurement of products from an Indian vendors meeting one of the two conditions:

• products that have been indigenously designed, developed and manufactured with a minimum of 40% Indigenous Content (IC) on cost basis of the total contract value; or

• products having 60% IC on cost basis of the total contract value, which may not have been designed and developed indigenously. This category has been accorded the highest priority, to boost the indigenous defence industry.

Ministry of Defence has not received any complaints with regard to implementation of the new DPP-2016.

This information was given by Defence Minister Shri Manohar Parrikar in a written reply to Shri Bhagwanth Khuba and others in Lok Sabha today.

PIB

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