Last week, while speaking at the ‘Webinar on Budget announcements: 2022-23 Aatmanirbharta in Defence – Call to Action’, Prime Minister Narendra Modi has given a clarion call for ‘Aatmanirbharta’, that the customisation and uniqueness of military hardware was critical to hold the advantage of surprise over India’s adversaries and it could be achieved only if weapons and systems are developed in the country.
He said- “If 10 countries have defence equipment of the same type, then your armed forces will have no uniqueness. For uniqueness and surprise element, military equipment has to be developed in our own country,”
The PM said India would soon notify a new list of weapons and systems that cannot be imported to promote self-reliance in the defence sector. This will be the third positive indigenisation list.
209 weapons and equipment for indigenous production
The government has already notified two lists of 209 weapons and equipment that cannot be imported. These include artillery guns, missile destroyers, ship-borne cruise missiles, light combat aircraft, light transport aircraft, long-range land-attack cruise missiles, basic trainer aircraft, multi-barrel rocket launchers, assault rifles, sniper rifles, mini-UAVs, specified types of helicopters, next-generation corvettes, airborne early warning and Control (AEW&C) systems, tank engines and medium-range surface to air missile systems.
The PM said after the first two lists were notified, the government had signed contracts worth ₹54,000 crore for domestic arms procurement, and deals worth ₹4.5 lakh crore were in the works. He said the process of importing weapons was long and in some cases the military hardware would become outdated by the time it reached the armed forces.
The budget announcement got the wings
And within a week, the Ministry of Defence (MoD), offered four projects to the Indian Industry for design & development under Make-I category of Defence Acquisition Procedure (DAP) 2020. The industry will be provided financial support for prototype development of these projects. The defence ministry has cleared a total of nine such projects: four under the ‘Make-I’ and five under the ‘Make-2’ categories of the Defence Acquisition Procedure 2020.
The ‘Make’ category of capital acquisition is the cornerstone of the Make in India initiative that seeks to build indigenous capabilities through the involvement of both public and private sector. ‘Make-I’ refers to government-funded projects while ‘Make-II’ covers industry-funded programmes.
Approval In-Principle
The list of projects which were accorded ‘Approval In-Principle (AIP)’ by Collegiate Committee of MoD is as follow:
- Indian Air Force: Communication Equipment with Indian Security Protocols (Routers, Switches, Encryptors, VoIP Phones and their software)
- Indian Air Force: Airborne Electro Optical pod with Ground Based System
- Indian Air Force: Airborne Stand-off Jammer
- Indian Army: Indian Light Tank
This is for the first time since the launch of industry-friendly DAP-2020 that Indian Industry has been involved in development of big-ticket platforms such as Light tank and Communication Equipment with Indian security protocols.
In addition, AIP has also been accorded to following five projects under industry-funded Make-II procedure:
- Indian Air Force: Full Motion Simulator for Apache Helicopter
- Indian Air Force: Full Motion Simulator for Chinook Helicopter
- Indian Air Force: Wearable Robotic Equipment for Aircraft Maintenance
- Indian Army: Integrated Surveillance and Targeting System for Mechanised Forces
- Indian Army: Autonomous Combat Vehicle
Projects under ‘Make-II’ category involve prototype development of equipment/system/platform or their upgrades or their sub-systems/sub-assembly/assemblies/components, primarily for import substitution/innovative solutions, for which no Government funding will be provided for prototype development purposes.
The indigenous development of these projects in the country will help harness the design capabilities of the Indian defence Industry and position India as a design leader in these technologies.
These projects have a positive cascading effect on the entire defence ecosystem. The indigenous development of these projects will help harness the design capabilities of the Indian defence industry and position India as a design leader in these technologies.
Further, it needs to be looked at in the context of what has been happening till now. As PM has said – “Defence procurement and purchase is also a matter of competition for foreign suppliers and each purchase leads to allegations and competitors want to show the others equipment as lower. This opens doors for corruption and sows seeds of doubts in mind of buyers about the equipment being purchased. “What is good for us or not good for us is mired in confusion created by the corporate battles.”
Usually, as we used to import items from outside, a local private company used to assemble the items by doing a joint venture with an outside company, or used to manufacture it here. Even the government companies like HAL, DRDO or OFB used to make weapons here, but at a very slow pace.
The biggest problem for private players was that even if they made something, who would be their customer? Apart from that, it was also a challenge whether the Arms made by them would be able to meet the needs of the forces or not.
Further, it required many years of testing, to be done in every season, in every terrain. For all this, any private player had to make an initial investment, and it was worth several hundred or thousand crores. That too, when no private player could have surety whether his goods would be bought or not. There was a huge risk.
The government has created a solution for this. The projects have prior approval (9 projects in Make 1 and Make 2 categories), secondly and importantly projects under ‘Make-I’ category will be funded by the government. Multiple companies can give proposals and project plans for any project, after that the best one will be funded, from day one. Army and Airforce, with their technical experts, will work on that project with Private Vendor, so that their specific needs, quality and compliance can be met, and no rework will have to be done.
The solution has many inbuilt advantages. For example, requirements of the defence forces will be met soon, there is not much risk for Private Vendor. It will also reduce the time, efforts and cost to make weapons and to procure weapons.
Needless to say, the country will be moving towards being self-sufficient, saving several thousand crores annually.
Another subcategory under ‘Make’ is ‘Make-III’ that covers military hardware that may not be designed and developed indigenously, but can be manufactured in the country for import substitution, and Indian firms may manufacture these in collaboration with foreign partners.
In the Union Budget announced on February 1, India earmarked ₹84,598 crore — 68% of the military’s capital acquisition budget — for purchasing locally produced weapons and systems to boost self-reliance in the defence sector, besides setting aside 25% of the defence R&D budget for private industry, startups and academia to encourage them to pursue design and development of military platforms.
India has set aside ₹70,221 crore — 64% of the military’s capital budget — for domestic defence procurement last year, compared to ₹51,000 crore, or 58% of the capital budget, in 2020-21.
