Atmanirbhar Bharat: Defence ministry puts 101 defence items under import embargo

NEW DELHI: In a push for Atmanirbhar Bharat, the defence ministry has brought out a list of 101 items that will be placed under import embargo. The move is seen as boost to indigenous manufacture of military hardware.

With this, the defence ministry estimates that contracts worth almost ₹4 lakh crore will be given to domestic industry in the next five to seven years. It has also bifurcated capital procurement budget for 2020-21 between domestic and foreign capital procurement routes. A separate budget head has been created with about ₹52,000 crore for procurement from domestic firms this year, a move hailed by Indian industry.

The announcement comes a few days after India brought out a new Defence Production and Export Promotion Policy 2020 (DPEPP 2020) which identified defence manufacturing as a key part of a strategy to kickstart the overall economy, emerging from one of the strictest lockdowns in the world due to the covid-19 pandemic.

Of the ₹4 lakh crore worth of contracts Indian private companies are to get, ”almost ₹1,30,000 crore each are anticipated for the Army and the Air Force while items worth almost ₹1,40,000 crore are anticipated by the Navy over the same period,” defence minister Rajnath Singh said in a series of tweets on Sunday.

The list includes "not just simple parts but also some high technology weapon systems like artillery guns, assault rifles, corvettes, sonar systems, LCHs (light combat helicopters) transport aircrafts, radars and many other items to fulfil the needs of our defence services," Singh said.

A separate statement from the defence ministry said the Indian Navy is to place orders for six submarines at an approximate cost of almost ₹42,000 crore. This is to be produced by an Indian company along with a foreign technology partner under the strategic partnership model. The Indian Air Force is also looking at placing orders for 123 LCA (Light Combat Aircraft) MK 1A worth an over ₹85,000 crore from Hindustan Aeronautics Limited. On its part, the Indian army is expected to place an order for 200 wheeled armoured fighting vehicles (AFVs) at an approximate cost of over ₹5,000 crore, it said.

Sunday’s "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 and developed by DRDO to meet the requirements of the Armed Forces," the minister said.

“The embargo on imports is planned to be progressively implemented between 2020 to 2024. Our aim is to apprise the Indian defence industry about the anticipated requirements of the Armed Forces so that they are better prepared to realise the goal of indigenisation," the minister said.

India is one of the biggest military spenders in the world with a large defence equipment import bill. The US, China and India were the world’s three biggest military spenders in 2019, followed by Russia and Saudi Arabia, the Stockholm International Peace Research Institute (SIPRI) said in a report in April. India’s spending grew by 6.8 % and touching $71.1 billion, the report said.

In February, Prime Minister Narendra Modi, speaking at the Defence Expo in Lucknow, had set an annual target of $ 5 billion in defence exports from India by 2025. He had also set Indian industry the annual target of $25 billion in local manufacture of armaments required by the Indian military by 2025.

Welcoming Sunday’s announcements, Baba Kalyani, chairman and managing director of Bharat Forge, a leading forging company, said the new moves were a "strategic" step that will "propel the Atmanirbhar Bharat narrative and bolster Indian defence equipment manufacturing industry."

"The growth of the domestic industry especially the MSME sector, will lead to self-reliance, reduced expenditure on imports, saving of foreign currency, creating job opportunities, revival of consumption and ultimately getting us closer to the common goal of $5 trillion economy,” a statement quoting Kalyani said.

Chandrajit Bannerjee, director general of the Confederation of Indian Industry (CII) lobby group said the announcement of a "negative import list of defence systems and platforms marks the launch of a 'new glide path' for 'AtmaNirbhar Bharat."