MoD to procure 346 items indigenously to boost domestic defence manufacturing

In a bid to minimise imports and achieve self-reliance in the defence sector, the Ministry of Defence (MoD) has released fifth positive indigenisation list (PIL) consisting of 346 items, which will be procured from domestic manufacturers. With the release of the new list, India expects to procure a total of 5012 items indigenously in the coming years.

The defence public sector undertakings involved in the fifth positive indigenisation list include Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics (BDL), BEML, India Optel (IOL), Mazagon Dock Shipbuilders (MDL), Goa Shipyard (GSL), Garden Reach Shipbuilders & Engineers (GRSE) and Hindustan Shipyard (HSL).

With this initiative, the ministry aims to bolster indigenous capabilities, save foreign exchange, reduce dependency on foreign manufacturers, boost economic growth, increase defence investment, and enhance domestic defence design through academic and research collaboration.

The items under the new list that will now be exclusively procured from the Indian industry include line replacement units, systems and subsystems, assemblies and sub-assemblies, components and various raw materials. These items represent an import substitution value of Rs 1,048 crore.

To facilitate this indigenisation process, the DPSUs issue Expressions of Interest and Requests for Proposals for the items they require on their respective websites and the Srijan Portal. The Indian companies including MSMEs and start-ups then express their interest in designing, developing or manufacturing these items based on their capability or through joint ventures with OEMs.

The Defence Ministry unveiled the Srijan portal in 2020, the same year when it announced the Defence Acquisition Procedure 2020. The portal aims to partner with the private sector in the country's indigenisation efforts. A non-transactional online marketplace, Srijan lists the indigenised items required by the DPSUs and Service Headquarters (SHQs). Presently 19 organisations list their requirements with 16 DPSUs and the three service headquarters (army, navy and air force).

Before this, the four PILs included 4,666 items, a little over 60% of these items with an import substitution value of Rs 3,400 crore, have already been indigenised. Aside from these five lists, five PILs of 509 items have been so far notified by the Department of Military Affairs separately. These lists include highly complex systems, sensors, weapons and ammunition.

By June 2024, DPSUs and SHQs offered over 36,000 defence items for indigenisation. Over the past three years, more than 12,300 items have been indigenised, leading to DPSUs placing orders worth Rs 7,572 crore with domestic vendors.

The positive indigenisation list enables the defence sector to work towards the government’s Atmanirbhar Bharat and Make in India initiatives to promote local manufacturing of defence equipment. As per a study by a Swedish think tank, Stockholm International Peace Research Institute (SIPRI), India became the world’s top arms importer during 2019-23 with a growth of 4.7% in imports in comparison with the period 2014-18.

In an October 2023 address at the Indian Navy’s 'Swavlamban 2.0' seminar, Defence Minister Rajnath Singh said, "Due to foreign invasions, the word 'local' became synonymous with low quality. We're now freeing ourselves from that mentality. In the coming times, they (the youth) will play a big role in the development of the country with their innovative approach and knowledge.”

In March this year, the Ministry of Defence signed five capital acquisition contracts worth Rs 39,125.39 crore with Hindustan Aeronautics, Larsen & Toubro, and BrahMos Aerospace for procurement of close-in weapons systems, BrahMos missiles among others.