Policy

‘Make in India’ defence projects no more than 1% of sector’s budget

Nayanima Basu New Delhi | Updated on January 20, 2018

40% of the 23 identified projects worth ₹20 cr or less



The total value of the 23 Make In India projects identified by the Ministry of Defence for domestic players is said to be less than 1 per cent of the entire Defence Budget.

While 40 per cent of the projects are valued at ₹20 crore or less, only three projects have an annual outlay of ₹300 crore, government sources told BusinessLine.

In the current Union Budget ₹2,58,589 crore has been allocated for Defence, excluding pensions. Of this, ₹78,586 crore has been allocated for capital expenditure.

This compares with ₹2,46,727 crore allocated in the last budget, of which ₹2,33,341 crore was spent.

Of the 23 projects, 13 have been identified for the Indian Army, six for the Navy and four for the Air Force. “This is just the first step towards implementing the new Defence Procurement Procedure (DPP) in which the focus is on Make in India. This is not a confirmed list yet. More such projects are in the pipeline,” a top official said.

The official also said that the projects have been identified in such a way that all players, be they big, small or medium enterprises can take part.

Two categories

The Make in India category in the new DPP has been divided into two categories — ‘Buy (Indian)’, with 40 per cent indigenous content, and ‘Buy and Make (Indian)’ having an overall indigenous content of 50 per cent.

The 23 projects fall under both these categories.

According to the official, some of the items mentioned in the 23 projects have a constant demand, such as 125mm smooth bore gun barrels, 1,000HP engines, supersonic aerial targets, diesel engines, ground rockets and glider bombs.

Off the shelf

“These products have steady demand in all the three services. Now, these will be available off the shelf, which is extremely important,” the official added.

Earlier, the government mostly used to import these items, with some manufactured by defence public sectors units and ordinance factories.

In the new DPP, which came into effect from April 2, the Ministry of Defence has introduced a new category of acquisition — Indigenous Design Development and Manufacturing (IDDM). Under this category, indigenously designed equipment with 40 per cent domestic content or equipment with 60 per cent indigenous content will be considered for acquisition. This category will be the most preferred acquisition category.

With inputs from Richa Mishra

Published on May 02, 2016

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