Recently, the Ministry of Defence released the third positive indigenisation list of 101 items. This follows the first Negative Indigenisation List, which comprised 101 items and was notified in August 2020, and the second list, which was notified in June 2021 and constituted a 108-item import list.
The Third List and Its Significance
The third list includes highly complex systems, sensors, weapons, and ammunition such as lightweight tanks, mounted artillery gun systems, and next-generation offshore patrol vessels (NGOPVs). These platforms are planned to be progressively indigenised from December 2022 to December 2027 and will be procured from local sources in accordance with the Defense Acquisition Procedure (DAP) 2020.
The DAP 2020 procurement categories include Buy (Indian – Indigenously Designed Developed and Manufactured), Buy (Indian), Buy and Make (Indian), Buy (Global – Manufacture in India), and Buy (Global).
Significance of the Initiative
The adoption of these weapons and platforms is expected to boost domestic industry. The other benefits include reducing fiscal deficit, strengthening security against porous borders and hostile neighbours, generating employment, and instilling a sense of nationalism, integrity, and sovereignty among the Indian Forces.
Indigenisation of Defence: An Overview
Indigenisation, the capability of developing and producing any defence equipment within the country, aims to achieve self-reliance and reduce the burden of imports. Self-reliance in defence manufacturing is a key objective of the Department of Defence Production. The Defence Research Development Organisation (DRDO), Defence Public Sector Undertakings (DPSUs), and private organisations play a critical role in this process.
The need for indigenisation is evident, as India is among the world’s largest arms importers, with its armed forces expected to spend approximately USD 130 billion on defence purchases over the next five years.
Historical Perspective of Defence Indigenisation in India
India’s overdependence on the Soviet Union brought about a shift in its approach to defence industrialisation. From the mid-1980s, the government pumped resources into R&D to enable the DRDO to undertake high-profile projects. Indigenisation efforts were not adequate to meet the requirements of the armed forces initially, leading to a shift towards co-development and co-production in partnership with foreign companies.
Challenges Faced During Indigenisation
The indigenisation process has faced several challenges including institutional capacity issues, infrastructural deficits, land acquisition problems, and policy dilemmas. To address these, the government has taken several initiatives such as increasing the Foreign Direct Investment (FDI) limit, implementing the Defence India Startup Challenge, launching the SRIJAN Portal, and more.
Looking Ahead: Potential Solutions and Initiatives
Future solutions may include setting up a Permanent Arbitration Cell to deal with objections and disputes; boosting the private sector, which can infuse required technology and human capital; enhancing financial and administrative autonomy for DRDO; improving in-house design capability among the three services, and establishing robust supply chains.
Advances in software industry technologies such as Artificial Intelligence and cyber security should also be utilised to develop and manufacture equipment indigenously. Additionally, training and longer tenures for the staff at the Department of Defence Production can ensure continuity and effectiveness in this critical mission of defence indigenisation.
