In a sharp decision, the Indian Ministry of Defense is planning to ban the importation of weapons that can be domestically manufactured in an effort to boost local business participation in the defense market.
The new self-reliant strategy was announced by Prime Minister Narendra Modi during the nationwide lockdown, which also significantly impacted the defense sectors. The strategy was implemented in the amended draft of the Defense Acquisition Procedure (DAP) on July 28.
India also estimated it would export its domestically manufactured weapons worth of 15,000 crore INR ($2 billion USD) in the global market for 2020-2021 fiscal year. In the last two fiscal years, India exported weapons worth an estimated 1.2 and 1.3 billion dollars each, according to the Department of Defense Production.
The draft of DAP which was reconstructed by taking advised and reviews of various stakeholders in March 2020 has updated four new chapters in the amended DAP last month as follows:
1) leasing; simplified capital expenditure procedure;
2) Acquisition of systems products and ICT systems;
3) Procurement from DRDO (Defence Research and Development Organisation),
4) Dealing with DPSUs (Defence Public Sector Units) and OFB (Ordnance Factory Board).
After this draft, Indian defense policymakers are seeking an entirely new approach to market domestic-built defense products.
The DAP’s primary goal is to promote self-reliance in defense equipment production and indigenous military technologies, with the ultimate goal of developing India as a global defense manufacturing hub in the near future. The Ministry of Defense has asked stakeholders in defense sectors to submit feedback by August 10, 2020.
India is already one of few countries to develop its own indigenous fighter aircraft Tejas, as well as warships, ballistic and cruise missiles like Agni and Brahmos, and other equipment such as radar and electronic warfare suites.
India is already self-reliant in many sectors and the Modi administration aims to create a sustainable environment for defense sectors in India with equal participation by private firms with public sector industries.
While aligning with the Make in India initiative, the ministry sought a separate budget head for weapons and defense projects developed under the initiative with provisions to ease the transition of funds and deals to complete.