Modernisation of Indian Armed Forces
During last financial year (2019-20), 38 contracts have been signed with Indian vendors and 32 contracts have been signed with Foreign vendors. During current Financial Year 2020-21 (Upto July, 2020), 10 contracts have been signed with Indian vendors and 6 contracts have been signed with Foreign vendors for capital procurement of defence equipment for Armed Forces.
Out of the total of 48 capital acquisition contracts signed with Indian vendors from April 2019 to July 2020, 18 contracts have been signed with DPSUs/PSUs/OFB/DRDO/ISRO and 30 contracts have been signed with Indian Private vendors.
It may be noted that in May 2001, the Defence Industry sector, which was hitherto reserved for the public sector, was opened up to 100% for Indian private sector participation, with Foreign Direct Investment(FDI) up to 26% both subject to licensing. Further, Department of Industrial Policy & Promotion, Ministry of Commerce & Industry has notified revised FDI policy under which FDI is allowed under automatic route upto 49% and beyond 49% through Government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.
During the last three financial year (2017-18 to 2019-20) and current year (upto July, 2020), 183 capital contracts have been signed with Indian vendors and foreign vendors for procurement of defence equipment for Armed Forces.
Under ‘Atmanirbhar Bharat’ campaign of Govt of India, Ministry of Defence (MoD) has prepared a list of 101 items for which there would be an embargo on the import beyond the timeline indicated against them. This would offer a great opportunity to the Indian defence industry to manufacture these items using their own design and development capabilities to meet the requirements of the Armed Forces in the coming years. This list includes some high technology weapon system like artillery guns, assault rifles, corvettes, sonar systems, transport aircrafts, light combat helicopters (LCHs), radars and many other items to fulfil the needs of our Defence Services.
Since the launch of ‘Make in India’ in September 2014, several measures have been taken by the Government to promote indigenous design, development and manufacture of defence & aerospace equipment in the country under ‘Make in India’ by harnessing the capabilities of the public and private sector.
Government has notified the Strategic Partnership (SP) Model which envisages the establishment of long term Strategic Partnership with Indian entities through a transparent and comparative process, wherein they would tie-up with global Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chain.
Government is taking measures for modernization of the Armed Forces, through procurement of new equipment and upgrading of existing equipment so as to ensure that the Armed Forces are equipped to meet the entire spectrum of security challenges. The modernization projects are progressed as per the approved Capital Acquisition Plans and in terms of the extant Defence Procurement Procedure (DPP).