The Government of India has promulgated its Defence Production Policy in January 2011. The objectives of the policy are to achieve substantial self-reliance in the design, development and production of equipment, weapon systems, platforms required for defence in as early a time frame as possible; to create conditions conducive for the private industry to take an active role in this endeavour; to enhance potential of SMEs in indigenisation and to broaden the defence R&D base of the country.
In pursuance of the Defence Production Policy 2011, the Government has taken the following major steps to promote the participation of private & public sector in the indigenous production of defence equipment:
- Technology Perspective and Capability Road map (TPCR), which gives out the details of the equipment and technologies required by our Armed Forces, has been put in public domain to provide the industry an overview of the direction in which the Armed Forces intend to head in terms of capability in future.
- Preference to ‘Buy (Indian)’, ‘Buy & Make (Indian)’ & ‘Make’ categories of acquisition over ‘Buy & Make (Global)’ and ‘Buy (Global)’ categories thereby giving preference to Indian Industry in procurement.
- The procedure for ‘Buy & Make (Indian)’ category has been simplified in order to make the category more attractive for Indian Defence Industry.
- A clear definition of indigenous content has been provided which would not only bring more clarity on the indigenous content required for different categorization, but also enhance the indigenization in defence products in India.
- Indian private sector industry has also been allowed to received ‘Maintenance Transfer of Technology (MToT)’ in ‘Buy (Global)’ cases.
- FDI policy in defence sector has been reviewed and as per the new policy, composite foreign investment upto 49% has been allowed through FIPB route and beyond 49% with the approval o the Cabinet Committee on Security (CCS).
- Defence products list for the purpose of industrial licensing has been revised and most of the components / parts / raw materials, have been taken out from the revised list from purview of industrial licensing.
- Defence Exports Strategy has been formulated and is put in public domain. The Standard Operating Procedure (SOP) for issuing NOC for export of military stores has been simplified and processed for issuing NOC has been made online.
- The list of ‘Military Stores’ for purpose of issuing of NOC for export has been defined and put in public domain.
The capital procurement of defence weapons / equipment is carried out as per the provisions of Defence Procurement Procedure – 2013 (DPP-2013). During 2014-15, contracts have been signed with Indian vendors for Capital Procurement of various defence equipment including Rockets, Guns, Aircraft and missiles.