The capital procurement of defence equipment / weapons for the Indian Army is guided by provisions of Defence Procurement Procedure-2013 wherein preference is accorded to ‘Buy (Indian)’, ‘Buy and Make (Indian)’ and ‘Make’ categorisation over ‘Buy (Global)’ & ‘Buy and Make (Global)’ categorisation, thereby giving priority to indigenous weapons / equipment. The Government has taken following major steps to promote indigenous manufacturing capabilities of defence equipment in the country:-
• FDI policy in defence sector has been reviewed and as per the revised policy, composite foreign investment upto 49% is allowed through Government route (FIPB) and beyond 49%, with the approval of Cabinet Committee on Security (CCS) on case-to-case basis, wherever it is likely to result in access to modern and state-of-the-art technology in the country. Besides, the restrictions such as single largest Indian shareholder to hold atleast 51% equity and complete restriction on Foreign Institutional Investor (FII) existing in the earlier policy have also been removed to facilitate investments in the sector.
• To promote the participation of private sector, particularly SMEs for defence manufacturing, Outsourcing and Vendor Development Guidelines for DPSUs and Ordnance Factory Board (OFB) have been formulated. The guidelines mandate that each DPSU and OFB to have a short-term and long-term outsourcing and vendor development plan to ‘gradually, increase the outsourcing from private sector including SMEs. The guidelines also include vendor development for import substitution.
• To establish a level-playing field between Indian private sector and the public sector, the anomalies in excise duty / custom duty have been removed. As per the revised policy, uniform Custom & excise duties shall be levied on all companies in the public & private sector.
• The Defence Products List for the purpose of issuing Industrial Licences (ILs) under IDR Act, has been revised and most of the components, parts, sub-systems, testing equipment, production equipment have been removed from the list, so as to reduce the entry barriers for the industry, particularly small & medium segment.
• The initial validity of the Industrial Licence granted under the IDR Act has been increased from 3 years to 7 years with a provision to further extend it by 3 years on a case-to-case basis.
This information was given by Minister of State for Defence Rao Inderjit Singh in a written reply to Shrimati Ranjanben Bhatt in Lok Sabha today.
Courtesy: pib.nic.in
• FDI policy in defence sector has been reviewed and as per the revised policy, composite foreign investment upto 49% is allowed through Government route (FIPB) and beyond 49%, with the approval of Cabinet Committee on Security (CCS) on case-to-case basis, wherever it is likely to result in access to modern and state-of-the-art technology in the country. Besides, the restrictions such as single largest Indian shareholder to hold atleast 51% equity and complete restriction on Foreign Institutional Investor (FII) existing in the earlier policy have also been removed to facilitate investments in the sector.
• To promote the participation of private sector, particularly SMEs for defence manufacturing, Outsourcing and Vendor Development Guidelines for DPSUs and Ordnance Factory Board (OFB) have been formulated. The guidelines mandate that each DPSU and OFB to have a short-term and long-term outsourcing and vendor development plan to ‘gradually, increase the outsourcing from private sector including SMEs. The guidelines also include vendor development for import substitution.
• To establish a level-playing field between Indian private sector and the public sector, the anomalies in excise duty / custom duty have been removed. As per the revised policy, uniform Custom & excise duties shall be levied on all companies in the public & private sector.
• The Defence Products List for the purpose of issuing Industrial Licences (ILs) under IDR Act, has been revised and most of the components, parts, sub-systems, testing equipment, production equipment have been removed from the list, so as to reduce the entry barriers for the industry, particularly small & medium segment.
• The initial validity of the Industrial Licence granted under the IDR Act has been increased from 3 years to 7 years with a provision to further extend it by 3 years on a case-to-case basis.
This information was given by Minister of State for Defence Rao Inderjit Singh in a written reply to Shrimati Ranjanben Bhatt in Lok Sabha today.
Courtesy: pib.nic.in
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