Govt nods to 45 companies/JVs operating in defence sector with foreign OEMs

The government has given approval to "45 companies/joint ventures" operating in the defence sector with foreign OEMs (original equipment manufacturers), the Parliament was informed on Friday.

Minister of State for Defence Ajay Bhatt said this in written response to a query in the Lok Sabha.

"The government has given approval to 45 companies/JVs operating in defence sector with foreign OEMs," he said responding to a query on the number of foreign companies who have shown interest in manufacturing defence equipment under foreign direct investment in the country.

Further, the government has taken several policy initiatives in the past few years and brought reforms to encourage indigenous design, development and manufacture of defence equipment in the country, thereby reducing dependency on imports in coming years, he said.

"These initiatives, inter alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020; notification of three Positive Indigenisation Lists (PILs) by the Department of Defence Production (DDP), MoD with a timeline beyond which they will only be procured from the domestic industry," the minister said.

These three lists consist of total 3,738 items, out of which 2,786 items have been indigenised till February 2023. Simplification of industrial licensing process with longer validity period; liberalisation of FDI policy allowing 74 per cent FDI under automatic route; simplification of make procedure; and launch of Innovations for Defence Excellence (iDEX) scheme involving start-ups and MSMEs, are among the other moves, according to the response.

Other steps include implementation of Public Procurement (Preference to Make in India), Order 2017; launch of an indigenisation portal namely SRIJAN to facilitate indigenisation by Indian industry including MSMEs; reforms in offset policy with thrust on attracting investment and transfer of technology for defence manufacturing by assigning higher multipliers; establishment of two Defence Industrial Corridors one each in Uttar Pradesh and Tamil Nadu, it said.