The Ministry of Defence has sanctioned nine projects centred around the design and development of military hardware, in an attempt to bolster domestic manufacturing. These projects, encompassing light tanks, airborne stand-off jammers, communication equipment, and simulators, fall under the Defence Acquisition Procedure (DAP) of 2020.
Defense Acquisition Procedure and ‘Make’ Categories
A significant aspect of DAP 2020 is the ‘Make’ category, fundamental to the Make in India initiative. Designed to enhance local capabilities, it includes both public and private sector involvement. There are three distinct sub-categories: ‘Make-I’, ‘Make-II’, and ‘Make-III’. ‘Make-I’ designates government-funded projects, with the focus on developing larger platforms like light tanks and communication equipment complete with Indian security protocols. ‘Make-II’ is used for industry-funded programmes involving prototype development or upgrades of military hardware intended for import substitution and doesn’t involve government funding. Lastly, ‘Make-III,’ refers to military hardware that isn’t necessarily designed and developed locally but can be manufactured within India for import substitution.
In the Union Budget 2022, India allocated Rs 84,598 crore, 68% of the military’s capital acquisition budget, for purchasing locally produced weapons and systems. Moreover, 25% of the defence R&D budget was set aside for private industry, startups, and academia. This is a move to boost their involvement in the design and development of military platforms.
DAP 2020 Explained
The DAP of 2020 aims at achieving self-reliance in defence manufacturing and focuses on Foreign Direct Investment (FDI). It lays down guidelines for the creation of a list of weapons or platforms banned from importation and introduces innovative concepts such as artificial intelligence incorporation into systems, use of indigenous software in defence equipment, and Start-ups and MSMEs as a new category of defence acquisition.
Moreover, it stipulates increased Indigenous Content (IC) requirements – jumping from 40%-50% to 50%-60% for all projects, depending on the specific category. Only under procurement through Buy (Global), foreign vendors can have 30% IC from Indian companies.
Initiatives to Boost Domestic Production of Defence Equipment
India has taken several steps to enhance domestic production of defence equipment. These include an increased Capital Acquisition Budget (CAB) for the domestic sector, the establishment of Defence Industrial Corridors, corporatization of the Ordnance Factory Boards, launching the Defence India Startup Challenge, and introducing the SRIJAN Portal.
Furthermore, the government proposed the Draft Defence Production and Export Promotion Policy 2020 and launched the Innovations for Defence Excellence (iDEX) and Mission Raksha Gyan Shakti.
By executing these initiatives, India is taking strides towards becoming self-reliant within the defence sector and boosting domestic manufacturing capabilities.
