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Defence Ministry proposes negative list of 101 items that will be domestically manufactured

Our Bureau New Delhi | Updated on August 09, 2020 Published on August 09, 2020

Defence Minister Rajnath Singh

Over ₹4 lakh crore worth of contracts to be earmarked for domestic industry in 7 years.

The Ministry of Defence (MoD) will introduce an import embargo on 101 items beyond a given timeline to boost indigenisation of defence production. It is estimated that contracts worth almost ₹4 lakh crore will be placed upon the domestic industry within the next 6 to 7 years after this step.

In a series of tweets, Defence Minister Rajnath Singh said that this is in line with the Atmanirbhar Bharat initiative. The formulation of a negative list was proposed in the draft Defence Acquisition Procedure (DAP) 2020.

"The list also includes, wheeled Armoured Fighting Vehicles (AFVs) with indicative import embargo date of December 2021, of which the Army is expected to contract almost 200 at an approximate cost of over ₹5,000 crore," the Defence Minister tweeted.

"Similarly, the Navy is likely to place demands for submarines with indicative import embargo date of December 2021, of which it expects to contract about six at an approximate cost of almost ₹42,000 crore. For the Air Force, it is decided to enlist the LCA MK 1A with an indicative embargo date of December 2020. Of these, 123 are anticipated at an approximate cost of over ₹85,000 crore," a Defence Ministry statement said.

A timeline

The proposed negative list covers items worth almost ₹1,30,000 crore each anticipated for the Army and the Air Force while items worth almost ₹1,40,000 crore are anticipated by the Navy.

The negative list includes sniper rifles, short-range surface-to-air missiles, ultra-light Howitzers, among others, by December 2020. Light machine guns, assault rifles, anti-tank mines, among others, by December 2021.

It also includes lightweight rocket launchers by December 2022,  ASTRA-MK I Beyond Visual Range Air-to-Air Missile by December 2023, small jet engines with 120kgf thrust by December 2024 and long range land attack cruise missile by December 2025.

"This decision will offer a great opportunity to the Indian defence industry to manufacture the items in the negative list by using their own design and development capabilities or adopting the technologies designed & developed by DRDO to meet the requirements of the Armed Forces," Singh said.

 

 

"The list is prepared by MoD after several rounds of consultations with all stakeholders, including the Armed Forces, public and private industry, to assess current and future capabilities of the Indian industry for manufacturing various ammunition and equipment within India," he added.

Progressive implementation

BusinessLine had reported earlier this month that a negative list for defence equipment imports was being prepared.

 

It is estimated that almost 260 schemes of such items were contracted by the Tri-Services at an approximate cost of ₹3.5 lakh crore between April 2015 and August 2020.

The embargo on imports is planned to be progressively implemented between 2020 to 2024. All necessary steps would be taken to ensure  that  timelines  for production of equipment as per the Negative Import List are met, which will include a co-ordinated mechanism for hand holding of the industry by the Defence Services, Singh said.

 

The MoD has also bifurcated the capital procurement budget for 2020-2021 between domestic and foreign capital procurement routes. A separate budget head has been created with an outlay of nearly ₹ 52,000 crore for domestic capital procurement in the current financial year, Singh added.

The number of equipment in negative list at year ending

December 2020 -- 69

December 2021 -- 11

December 2022 -- 4

December 2023 -- 8

December 2024 -- 8

December 2025 -- 1

Total items in negative list -- 101

Industry bodies welcome announcement

Various industry bodies welcomed the Defence Minster's announcement. Chandrajit Banerjee, Director General, CII, said, "Defence Minister's announcement for Negative Import List of Defence systems and Platforms marks the launch of a 'new glide path' for Atmanirbhar Bharat."

SP Shukla, Chair, FICCI Defence Committee, said, "The negative list provides a long-term visibility on defence procurement plans. Industry can now plan its capex & production capacity."

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Published on August 09, 2020
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