House panel suggests sops to motivate indigenous defence manufacturers

Amrita Nair-Ghaswalla Mumbai | Updated on March 27, 2018 Published on March 27, 2018

Last year, the Defence Ministry approved the procurement of an improved version of Akash, with a domestically produced sensor   -  BY SPECIAL ARRANGMENT

Voices concern over rising import bill


Huge dependence on foreign suppliers for military hardware continues to be a cause for concern, with the Standing Committee on Defence worried about the burgeoning import bill.

Suggesting that indigenous manufacturers be liberally encouraged, the Committee said they should be provided incentives to design and develop defence equipment so that India sheds the tag of largest defence importer in the world.

Contracts signed

At a recent meeting, the Committee was informed that 187 contracts valued at ₹2,40,814.22 crore were signed during the last three years, until November 30, 2017. This included 119 contracts signed with Indian vendors involving ₹1,16,522.89 crore, and 68 contracts with foreign vendors involving ₹1,24,291.33 crore.

Major defence equipment imported during the last three years included rockets, simulator and component level repair facility for tanks from Russia, and laser designation pods, radars, pods for aircraft, radios, weapons for ‘Garuds’ and missiles from Israel.

From the US, aircraft, helicopters, missiles, artillery guns and simulators were imported, while France supplied ammunition and Bimodular Charge System (BMCS) high zone modules of artillery guns.

“More than 60 per cent of defence-related requirements are met by imports. This offers a huge opportunity for import substitution. India has saved over $5 billion of its foreign reserves with its home-grown Akash missiles,” said an official with a private defence contractor.

“Last year, the (Defence)s ministry scrapped a global tender for additional SRSAMs and approved the procurement of an improved version of Akash, with a domestically produced sensor,” the official added.

Earlier, neither the army nor the air force was keen on the missile system. They wanted the system to have a sensor to accurately track and target incoming missiles. “The advanced Akash system has done just that. Much more encouragement is needed,” the official said.

Imports during 12th Plan

During the 12th Plan, from 2012-13 to 2016-17, 107 contracts involving ₹1,50,507.38 crore were signed with foreign vendors for capital procurement of defence equipment, the Committee was informed.

Substantial import content of defence equipment manufactured by Defence Public Sector Undertakings (DPSUs) and Ordinance Factory Boards (OFBs) was also discussed.

At the recent meeting, it was noted that in the case of Hindustan Aeronautics Ltd (HAL), the import component is said to range from 44 to 60 per cent, while 41 to 49 per cent was manufactured by Bharat Electronics Ltd (BEL).

The Committee was informed that in the case of equipment manufactured by BEML, the import content is over 20 per cent.

Components for ships

The import component of ships manufactured by Hindustan Shipyard Ltd (HSL) is around 30 per cent. In the case of ships manufactured by Mazagon Dock Shipbuilders Ltd (MDL) import content ranges between 54 and 72 per cent.

It was pointed out that MDL constructed the P17A (Project 17A-class frigate for the Indian Navy) with 72 per cent import content, while another platform, the P15B (Visakhapatnam class of stealth guided missile destroyers for the Indian Navy) was constructed with 68 per cent import content.

The Committee was also informed that the import content of OFB’s defence products during the last three years ranged between 8.9 and 15.15 per cent.

Terming the situation as grave, the Committee noted that in the interest of national security, appropriate measures be taken under the Make In India policy for achieving self-reliance.


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Published on March 27, 2018
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