DDP Provides Impetus to Indigenous Defence Manufacturing

By Editor 03-Feb-2021

When the central government rolled out the Defence Production and Export Promotion Policy (DPEPP) setting a USD 25 billion defence production target, including making USD 5 billion from exports, by 2025, it resonated with India’s long-term ambition of achieving self-reliance in defence production. The Department of Defence Production (DDP) has been at the forefront of realizing this vision and Raj Kumar, Secretary, Department of Defence Production, has been at the helm of DDP with transparent and streamlined procurement procedures, production policies and ‘Make in India’ initiatives providing significant stimulus to demand for indigenous products. Undoubtedly, the DPEPP will bolster local production of weapons and platforms by developing “a dynamic, robust and competitive” defense industry.

Attaining self-reliance in defence industry has been the long-term ambition of India and the same has been the cornerstone of India’s defence production policy. The recent call by the Prime Minister Narendra Modi for “Atma Nirbhar Bharat” has provided further stimulus to realise the goal of self-reliance in defence. And all these visions and goals have resonated when the government recently introduced a new draft policy that sets a USD 25 billion defense production target, including making USD 5 billion from exports, by 2025.

The present ‘Defence Production & Export Promotion Policy (DPEPP) 2020’ is positioned as Ministry of Defence’s overarching guiding document to provide a focused, structured and significant thrust to defence production capabilities of the country for self-reliance and exports.

And it is undoubtedly clear that the Department of Defence Production (DDP) has been at the forefront of realizing the vision and Raj Kumar, Secretary, Department of Defence Production, has been at the helm of DDP with transparent and streamlined procurement procedures, production policies and ‘Make in India’ initiatives providing significant stimulus to demand for indigenous products.

“There is a focus within the government on indigenization of imported items, including materials. In addition to boost indigenization, the DPEPP aims to give a push to 'Make in India' and to seek substitute of imported items. The plan to increase the turnover of the domestic defence industry to USD 25 billion by 2025 can only happen if we make conscious efforts to minimise imports beginning with the negative list of imports, realistic GSQRs (General Staff Service Quality Requirements), provide enough budgetary support for domestic procurement,” Kumar said during a webinar attended by various defence companies last year.

Over the years, Indian Defence industry, which primarily catered to the needs of the armed forces, has evolved with diversified product mix and market. Propelled by the recent successes in exports, India is set to realize its potential as an emerging defence manufacturing hub. India is also preparing country-wise profiles of defence products and platforms to promote exports. Raj Kumar had said that the domestic defence industry will hold web interactions with the representatives of friendly countries to figure out what kind of products and platforms they require.

Growth Boosters by DDP

DDP has facilitated establishment of wide-ranging production facilities of various defence equipment through Ordnance Factories and Defence Public Sector Undertakings (DPSUs) and, through licensed private sector companies. This has resulted in the development of a diverse range of products such as arms and ammunitions, tanks, armored vehicles, heavy vehicles, fighter aircrafts and helicopters, warships, submarines, missiles, ammunition, electronic equipment, earth moving equipment, special alloys and special purpose steels.

Green Channel Status Policy (GCS)

Promoting the role of private sector in defence production has been another focus area by the DDP over the last few years and the most prominent among the activities were the introduction of the Green Channel Status Policy (GCS). The grant of green channel certificate to a firm provides deemed registration status, waiver of pre-dispatch inspection and acceptance of stores under supplying firm's guarantee or warranty against the contracts concluded by various procurement agencies under the ministry. Green Channel Status granted to14 Firms have so far and they include the various branches of BEL, BPCL, Bharat Forge Ltd., HPCL, and L&T Defence.

Self-Certification of DPSUs and Private Vendors-2019

Under the scheme for Self-Certification of DPSUs and Private Vendors-2019, defence firms were given the facility to supply stores directly to consignee without DGQA inspection. It encouraged them to assume direct responsibility to sustain and improve the standard of Quality. In light of the government reiterating self-reliance in the manufacture of defence products, the Self-certification scheme assumes greater significance.

Foreign Direct Investment and Industrial Licensing:

The department has published the revised FDI policy wherein FDI in Defence has been allowed under automatic route up to 74% and above 74% through government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.

Industrial Licenses are issued in Defence sector by Department for Promotion of Industry and Internal Trade (DPIIT) and Ministry of Home Affairs (MHA) under Industries (Development and Regulation) Act, 1951 and Arms Act, 1959. Industrial License applications are forwarded by DPIIT and MHA to DDP for comments. More than 500 licenses have been issued so far.

Innovation in Defence

Innovations for Defence Excellence (iDEX) was launched in 2018 with the objective of bringing startups to innovate, develop technology and solve problems related to defence and aerospace. iDEX has provided a platform for startups to get connected to the defence establishment and it has launched Defence India Startup Challenges (DISCs)-1, 2, 3 and 4 where close to 1000 Startups have participated, 29 challenges have been issued and 55+ winners declared. Since June 2019, 38 Contracts have been concluded with the iDEX winners for development of futuristic products.

During DISC 4 in September 2020, a unique initiative interim of “iDEX 4 Fauji” was also launched which supports innovations identified by members of the Indian Armed Forces and would enable seeking ideas from the soldiers/ field formations.

Atma-Nirbharata Week in Defence

DDP celebrated Atma-Nirbharata week in Defence between 7 and 14 August 2020 to promote indigenous development of materials and equipment to achieve self-reliance in defence manufacturing. During the week, the Defence Minister inaugurated the modernization/up-gradation of facilities and new infrastructure creation at DPSUs & OFB.

DDP launched SRIJAN Indigenization portal, which is a one stop shop online portal that provides access to the vendors to take up items for indigenization. FB has undertaken the modernization of E-24 building at OLF, Dehradun and Pinaka Rocket Complex at Ordnance Factory, Chanda. Hindustan Aeronautics Limited (HAL) handed over 500th Al-31FP overhauled engine and indigenized 46 items under Make-II having total value of Rs. 100 Crores.

Bharat Electronics Limited (BEL) launched Maareech Integration Facility and indigenized five items having total value of Rs. 31 Crores. BEML Ltd launched the Industrial Design Centre at Bengaluru and signed MoU on development of UAVs with IIT, Kanpur and  MoU on development of AI products with NASSCOM, Bengaluru.

Bharat Dynamics Limited (BDL) indigenized 11 items under Make-II having total value of 15 Crores. Goa Shipyard Limited (GSL) indigenized Gear Boxes for OPVs and inaugurated the new State of the art Steel Preparation Shop. GSL also signed MoU with IIT Goa for AI, IoT-CFD  and other technology related fields. Mazagon Dock Shipbuilders Limited (MDL) signed MoU for indigenous refurbishment and development of main motor of SSK Class Submarines with Medha Servo Drives Pvt Ltd

The department has set a target to indigenize 5000 spares currently being imported. For FY 2020-21, 1502 items are targeted to be indigenized, out of which 849 items have been indigenized as on date.

Defence Offset Policy 2020

Defence Offset Guidelines 2020 have been promulgated on 30 September 2020 as part of the Defence Acquisition Procedure 2020 enabling provisions to attract investments and technology through offsets to enhance capabilities in the domestic defence manufacturing sector and promote the “Make in India” initiative.