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India boosts Make in India with Rs 45,000 cr defense hardware purchase
Industry News- Sep 18,23
This comprehensive purchase encompasses new fighter aircraft, missiles, versatile light armoured vehicles, integrated surveillance and targeting systems, as well as survey vessels, all designed to modernise its armed forces.
In a renewed commitment to bolster self-reliance within the defence manufacturing sector, India, granted initial approval for the procurement of military equipment valued at Rs 45,000 crore. This comprehensive purchase encompasses new fighter aircraft, missiles, versatile light armoured vehicles, integrated surveillance and targeting systems, as well as survey vessels, all designed to modernise its armed forces.
The Defence Acquisition Council (DAC), which oversees acquisitions based on the armed forces' projected requirements, has sanctioned the procurement proposals from the three services under two significant categories emphasising indigenisation within the Defence Acquisition Procedure—namely, Buy (Indian-IDDM) and Buy (Indian). IDDM signifies products that are indigenously designed, developed, and manufactured.
The defence ministry, in a statement, highlighted that these weapons and systems will be sourced from Indian vendors, thereby providing a substantial impetus to the domestic defence industry.
India has allocated a portion of its defence budget to promote the procurement of locally-manufactured military hardware. In the current year's budget, approximately Rs 1 lakh crore has been earmarked for domestic procurement, a notable increase compared to Rs 84,598 crore, Rs 70,221 crore, and Rs 51,000 crore allocated in the preceding three years.
Among the DAC's approved proposals, the acquisition of 12 Sukhoi-30 MKI fighter jets and related equipment, valued at Rs 11,000 crore, from the state-run aerospace company Hindustan Aeronautics Limited (HAL) stands out. These fighter aircraft will replace the 12 Su-30 MKIs lost in accidents. India had initially contracted 272 Su-30 MKIs from Russia, with 222 of them being license-built by HAL.
Additionally, the council greenlit the procurement of Dhruvastra short-range air-to-surface missiles for advanced light helicopters (Mk-IV) and integrated surveillance and targeting systems to cater to the mechanised forces' requirements.
Furthermore, the acquisition plans encompass next-generation survey vessels and avionics upgrades for Dornier aircraft. Light armoured multipurpose vehicles and integrated surveillance and targeting systems are expected to enhance the protection, mobility, attack capabilities, and survivability of the mechanised forces. The approval also includes high-mobility towing vehicles designed to facilitate the swift mobilisation and deployment of artillery guns and radars.
The Buy (Indian-IDDM) category mandates that military hardware must have a minimum of 50% indigenous content based on the cost basis of the base contract price. Defence Minister Rajnath Singh advocated for raising this threshold to a minimum of 60-65% indigenous content and directed the top defence officials to collaborate with the local industry in achieving this goal.
The Buy (Indian) category, on the other hand, focuses on acquiring weapons and systems that may not have been originally designed and developed indigenously but still must have an indigenous content of 60% in terms of the cost basis of the base contract price.
Over the last four to five years, India has implemented various measures to promote self-reliance in defence, including establishing a separate budget for the purchase of locally-made military hardware, implementing phased import bans, increasing foreign direct investment from 49% to 74%, and improving the ease of doing business in the sector.
In May, India reported that the value of defence production in the country exceeded Rs 1 lakh crore for the first time, owing to significant reforms aimed at stimulating growth in the sector. This figure reached Rs 1,06,800 crore in FY 2022-23, compared to Rs 95,000 crore in FY 2021-22 and Rs 54,951 crore five years ago. India aspires to achieve a turnover of Rs 1,75,000 crore in defense manufacturing by 2024-25.
India has also issued four positive indigenisation lists in recent years, progressively imposing import bans on 411 different types of weapons and platforms, including light-weight tanks, naval utility helicopters, artillery guns, missiles, destroyers, ship-borne cruise missiles, light combat aircraft, light transport aircraft, long-range land-attack cruise missiles, basic trainer aircraft, airborne early warning and control systems, and multi-barrel rocket launchers. These lists, introduced in August 2020, May 2021, April 2022, and October 2022, encompass military hardware expected to be indigenised over the next five to six years, with a particular emphasis on replacing imported ammunition, which is a recurrent requirement.
Source: Hindustan Times
India
Defence
Self-Reliance
Military Hardware
Procurement
Indigenous Content
Defence Budget
Domestic Defence Industry
Sukhoi-30 MKI
Dhruvastra Missiles
Modernisation
Defence Acquisition Council
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