Plugging the defence gap

Plugging the defence gap

Subject :Polity

Srijan Portal-

• Pursuant to Atmanirbhar Bharat’s announcement, the Department of Defence Production has developed an indigenization portal, srijandefence.gov.in, as ‘opportunities for Make in India’ in Defence, which will give information on items that can be taken up for indigenization by the private sector. 
• On this portal, DPSUs/OFB/SHQs can display their items which they have been importing or are going to import which the Indian Industry can design, develop and manufacture as per their capability or through a joint venture with OEMs.
• The Indian Industry will be able to show their interest. The concerned DPSUs/OFB/SHQs, based on their requirement of the items and their guidelines & procedures will interact with the Indian industry for indigenization.
• SRIJAN is a ‘one-stop shop’ online portal that provides access to the vendors to take up items that can be taken up for indigenization.
• It will help industry partners to play an active role in the goal of self-reliance in the defence sector.
• It will give information on items that can be taken up for indigenization by the private sector.
• There are over 3000 unique items with a value of over ₹10,000 Crore that are available through the portal.

Defence Indigenization in India-

• A significant beginning in defence indigenisation was made in 1983 when the government sanctioned the Integrated Guided Missile Development Programme (IGMDP) to develop five missile systems:

1. Prithvi (surface-to-surface)
2. Akash (surface-to-air)
3. Trishul (the naval version of Prithvi)
4. Nag (anti-tank)
5. Agni Ballistic missiles with different ranges, i.e. Agni (1,2,3,4,5)

• In 1990 Self Reliance Review Committee (SRRV) under A.P.J. Abdul Kalam, had formulated a 10-year self-reliance plan under which, the self-reliance index (SRI), (defined as the percentage share of indigenous content in total procurement expenditure), was to be increased from 30% in 1992-1993 to 70 % by 2005.
• This target has not been achieved till today.
• The indigenous efforts were not adequate to meet the requirements of the armed forces, this resulted in the shift of focus towards co-development and co-production in partnership with foreign companies.
• A beginning was made in 1998, when India and Russia signed an inter-governmental agreement to jointly produce Brahmos supersonic cruise missile.
• Apart from Russia, India has also partnered with other countries such as Israel and France for a number of projects.

Government Initiatives-

• Defence Procurement Policy:
  • Based on the recommendations of the Dhirendra Singh committee, Defence Procurement Procedure 2016 (replaced DPP 2013) added an additional category “Buy (Indian-IDDM)”e Indigenously Designed, Developed and Manufactured, as the most preferred way of defence goods acquisition.
  • DPP allowed the Defence Acquisition Council to take a “fast-track” route to acquire weapons, something which was limited to only the armed forces till now.
• E-Biz Portal:
  • The process of applying for an Industrial License (IL) and Industrial Entrepreneur Memorandum (IEM) has been made completely online on ebiz portal.
  • The restriction of annual capacity in the industrial license for the defence sector has been removed.
• Outsourcing and Vendor Development Guidelines:
  • For DPSUs (defence public sector undertaking) and OFB (ordnance factory board) to promote the participation of the private sector, particularly SMEs (small manufacturing enterprises) for defence manufacturing.
  • The guidelines mandate that each DPSU and OFB to have a short-term and long-term outsourcing and vendor development plan to gradually increase outsourcing from the private sector including
  • The guidelines also include vendor development for import substitution.
• Uniform custom duty:
  • In order to establish a level-playing field between Indian private sector and the public sector, all Indian industries (public and private) are subjected to the same kind of excise and custom duty levies.
• The FDI policy:
  • Composite foreign investment up to 49% is allowed through the Government route (FIPB) and beyond 49% with the approval of the Cabinet Committee on Security (CCS) on a case-to-case basis.
  • Restrictions such as the single largest Indian shareholder to hold at least 51% equity and complete restriction on Foreign Institutional Investor (FII) have been removed to facilitate investment in the sector.

Preference to ‘Buy (Indian)’, ‘Buy & Make (Indian)’ & ‘Make’ categories of acquisition over ‘Buy (Global)’ category, thereby giving preference to the Indian industry in procurement.