Defence PSUs need to be revitalised, made more dynamic: Nirmala Sitharaman

Defence public sector undertakings (PSUs) and ordnance factories in the country have a lot of potential but they need to be revitalised and made more dynamic, Defence Minister Nirmala Sitharaman said on Monday.

The Acceptance of Necessity (AoN), an important procedure before placing an order, has been accorded for the procurement of 8,60,000 weapons, including assault rifles, close quarter battle carbines, carbines and light machine guns, she said.

The entire quantity has been earmarked for the Indian industry, excluding the Ordnance Factory Board, the minister said, adding that the government's thrust is on indigenous production of weapons by private players.

Eight different types of ammunitions including those for artillery guns, tanks, infantry combat vehicles, air defence guns and infantry vehicles, have been selected for manufacturing by the Indian industry, she said.

India has, over the years, invested heavily in defence production through defence PSUs and ordinance factories, Sitharaman said addressing a conference on 'Military Ammunition: Make in India-Opportunities and Challenges'.

These defence production units have been very crucial in addressing the requirements of the armed forces, she said.

However, the minister added, "For us, it is all the more important to make these units and the defence public sector undertakings a lot more dynamic. We have to revive them, revitalise them so that they are ahead of the curve."

Underlining the government's priorities for indigenous production, Sitharaman said its thrust has been on IDDM (Indian Designed, Developed and Manufactured).

"But of course, that's not all to exclude Make in India... Get the joint-venture, technology and manufacture it. We have not excluded licensed manufacturing.

"So, all of these is being covered without much of an exclusion that anyone would doubt that there is going to be restriction on any kind of manufacturing. Not at all," she said.

Listing out the initiatives undertaken by the government to encourage private participation in defence production, Sitharaman said the ministry has simplified Make II procedure (where no government funding is involved in production) under the Make in India programme.

"Once trials have been conducted, prototype have been developed, there has shall be a certain level of certainty and absence of ambiguity in your orders," she said noting that 21 projects have already been accorded in-principle approval under the Make II procedure of Make in India.

The minister said a defence quadrilateral corridor is also coming up in Uttar Pradesh that will connect Agra, Aligarh, Jhansi and Chitrakot to promote industries manufacturing weapons and military equipment.

This is similar to the defence quadrilateral corridor that is coming up in Tamil Nadu that will connect Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli.

Sitharaman said to encourage private players, the industrial licensing for defence has also been liberalised.