Govt simplifies Make in India rules for defence firms, offers 50 projects

The Ministry of Defence has released the second part of the simplified Make-II, the Make in India policy for the defence sector, in order to attract more private industries for manufacturing arms and ammunition. It has also initiated a first of its kind industry meet in Chennai and launched a Defence Investor Cell to facilitate industry participation. 

Under the simplified form, the industry can approach the defence departments on its own with products and ideas, which will then be considered by the concerned defence agency. So far, the industry has been supplying products that have been sought by the divisions according to their requirement.

Another feature is that once the prototype is submitted and the department agrees to the product and its quality, a Request for Proposal (RFP) will be issued and there is a guarantee that the product will be purchased, said Defence Minister Nirmala Sitharaman.  

"This will allay the concerns of the industry that whether the product will not be purchased even after spending time and developing it for defence," she said. Sitharaman was speaking at a first of its kind Defence Industry Development Meet in Chennai for forging a partnership with the industry for defence production.

Make-II deals with industry-funded projects primarily for import substitution, subsystems, and others. If it is an MSME (Micro, small and medium enterprise) or start-up, it will have government support if the prototype is under an outer limit of Rs 30 million. The ministry is offering around 50 potential projects with an assurance of orders on prototype completion and foreclosure protection.  

The new Make-II will reduce the timeline by almost 50 per cent, said Defence Production Secretary Ajay Kumar. The timeline will come down from around two to four years to one to two years.

The dependence on the import of defence products has been reduced in the past three years and efforts are underway to further reduce imports and enable Indian firms to export to other companies, she said.

Every year, the country procures around Rs 1.25 trillion worth of defence products, of which the public sector manufacturers and ordinance factories manufacture around Rs 500-550 billion and procurement is around Rs 450-500 billion. The rest of the requirement is addressed through imports. The micro, small and medium industry in the country is supplying around Rs 50 billion worth of products and they have a potential to increase it to Rs 100 billion by 2020, said Kumar. 

The minister proposed a plan to develop a corridor for the defence segment in South India, with L&T Shipbuilding facility at Kattupalli, the six ordinance factories in Tamil Nadu, the small manufacturers' cluster in Coimbatore and Hosur and the Hindustan Aeronautics Ltd in Bengaluru.

Sitharaman also announced that the Defence Expo biennial event would be held in Chennai this year. The event, which is delayed, will be held from April 11 to 16, in a place provided by the state government between Chennai and Mahabalipuram, the defence minister added.  

Usually, it is held towards the end of February and, most of the time, in Delhi.