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DAC approves Rs 1.45 trillion defence orders; to boost PSUs
Industry News- Sep 06,24
In FY24, the government granted Acceptance of Necessity (AoN) to proposals totalling approximately Rs 3.61 trillion under various capital procurement categories, aligning with the Defence Acquisition Procedure (DAP) 2020 to promote domestic manufacturing.
The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, has greenlit ten capital acquisition proposals worth Rs 1.45 trillion. This move aims to bolster domestic defence manufacturing and enhance the operational capabilities of the Indian Armed Forces.
Antique Stock Broking reports that this decision will significantly benefit public sector undertakings (PSUs) in the defence sector. The report highlights substantial growth in domestic defence manufacturing over recent years, with expectations for this trend to continue.
In FY24, the government granted Acceptance of Necessity (AoN) to proposals totalling approximately Rs 3.61 trillion under various capital procurement categories, aligning with the Defence Acquisition Procedure (DAP) 2020 to promote domestic manufacturing.
One key highlight is the increased share of domestic procurement in India's defence sector. The report notes that domestic procurement's share rose from 54% in FY19 to 75% in FY24. This trend is expected to continue, with over 99% of the newly approved proposals sourced from domestic industries under the ‘Buy (Indian)’ and ‘Buy (Indigenously Designed, Developed, and Manufactured)’ categories.
The DAC's approval aims to enhance the operational capabilities of the Indian Armed Forces. Antique Stock Broking anticipates significant growth for defence PSUs in the near to long term, given the Rs 1.45 trillion worth of projects approved for FY25.
The approved proposals include the acquisition of Future Ready Combat Vehicles (FRCVs) for the Indian Army, designed to be advanced Main Battle Tanks with superior mobility, all-terrain capability, and real-time situational awareness. Additionally, the procurement of Air Defence Fire Control Radars will improve aerial target detection and tracking. A proposal for Forward Repair Teams (Tracked) has also been approved to support in-situ repairs during mechanised operations.
These initiatives underscore the government's commitment to enhancing domestic capabilities within the defence sector, with the Defence Acquisition Procedure (DAP) 2020 strongly promoting domestic manufacturing. The significant increase in domestic procurement and the recent DAC approvals indicate continued growth and self-reliance in defence manufacturing.
(ET & ANI)
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