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Defence Indigenisation: Policy Overdrive & Learning from the Past.

Ministry of Defence has been on a policy overdrive for indigenisation of defence acquisitions. Not a week goes when there is a policy initiative that is announced by the Ministry of Defence (MOD) towards Atma Nirbharta or self reliance in defence.

The push by the Prime Minister Mr. Narendra Modi and monitoring by the Prime Minister’s office is more than obvious but this should not take away the share of the aplomb that the MOD deserves. Some of the policy and related declarations in this month (April 2022) are summarised as below-

A blanket dictat of sourcing, “all modernisation requirements of the Defence Services and Indian Coast Guard,” from indigenous sourcing “irrespective of the nature of procurement”. Imports should be undertaken as an exception to be approved by the Defence Acquisition Council DAC/Raksha Mantri (RM).

The MOD has essentially scrapped the Buy Global category as given in Para 12 of the Defence Acquisition Procedure 2020 which in any case were on the lowest priority in the procurement and were not generally encouraged.

But after the positive lists that have been issued and with the Make 1 and 2 proposals in March that have been outlined by the MOD there is a move that will result in focusing on indigenous procurement and cut off psyche in the armed forces procurement managers of thinking of importing from abroad.

Meanwhile the Defence Acquisition Council (DAC) has been provided the leeway to give exceptions given the operational requirements that have been placed by the armed forces from time to time.

For this the leasing route may be adopted as well to cover the gaps that may arise for procurement of state of the art equipment even though in this case as well there is a need for taking the approval of the Raksha Mantri or the Defence Minister only a Statement of Case for further indigenisation is not essential.

The Raksha Mantri Shri Rajnath Singh released the third positive indigenisation list of 101 items, on April 07, 2022. The three indigenisation lists now include 310 items many of which are substantial platforms.

MoD had a target of 64 per cent of Capital Acquisition Budget for domestic industry in Financial Year (FY) 2021-22 but utilised 65.50 per cent on indigenous procurements as per a press release.

Next the MOD to “promote Private Industry, MSMEs and Start-ups in defence production ecosystem”, has “decided that 25% of Domestic Capital Procurement/ Acquisition Budget, amounting to Rs. 21,149.47 Crore, will be earmarked for Domestic Private Industry in the Financial Year 2022-23”. The total indigenisation budget was 68% of Capital procurement budget during Financial Year 2022-23 that is an amount of Rs. 84,597.89 Crore.

Given that the erstwhile Ordnance Factories were contributing to approximately, Rs 50,000 Crores in defence production both in the capital and the revenue stream an assessment of the actual accretion indigenisation is difficult to assess till a breakdown is available.

Will all these result in timely force accretion and modernisation of the armed forces with state of the art that is 4.5 Generation tanks, combat fighters, submarines and so on?

That will continue to remain a question mark unless lessons from the past are applied to implement the policy initiatives and manufacturing lines are set up within the country which can produce these. There are several successful ventures which provide us useful guidelines some of which are summarised below-

L & T – Hanwa– K 9 T Vajra. L & T a industrial conglomerate in India signed a contract with Hanwa Defence of South Korea in 2017 for the K 9 Vajra T a modified version of the South Korean companies K 9 self propelled gun to the Indian Army.

In February 2021, the 100th gun was delivered by the company to the Indian Army ahead of the time indicating the success of the venture.

Mazagon Docks – Naval Group, France delivered the sixth of Scorpene Class submarines – Vagsheer for harbour trials in April. While there were several issues of transfer of technology and so on which had led to delays these have now been overcome. Importantly the MDL has an active submarine manufacturing line that can take on the 75 (I) Project of six subs if the procedure for the same is activated. Interestingly L & T shipbuilding is an active competitor in the model based on Strategic Partnership.

Hindustan Aeronautics Ltd – HAL – ALH. The HAL manufactured Advanced Light Helicopter (ALH-DHRUV), “a twin engine, multi-role, multi-mission new generation helicopter in the 5.5 ton weight class,” is an indigenous success story which has been replicated in successful follow up machines.


There could be more such instances but these are derived from instant recall to emphasise that establishing manufacturing lines of major platforms can be one option that is evident for achieving the Atma Nirbharta policy initiatives that have been undertaken by the Ministry of Defence recently.


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