The Defence Ministry has notified the Fifth Positive Indigenisation List for Defence Items, aimed at promoting self-reliance and reducing imports and boosting the domestic defence sector.Recent developments have underlined the need for India to have a comprehensive internal security plan. As India’s international stature grows and its economy strengthens, ensuring internal cohesion and addressing security challenges becomes paramount.
Key features of the Fifth Positive Indigenisation List
- Objective and Scope: The Fifth Positive Indigenisation List includes 346 items aimed at promoting self-reliance in the defence sector and reducing dependence on imports by Defence Public Sector Undertakings (DPSUs). It ensures that these items are procured exclusively from Indian industry, including Micro, Small and Medium Enterprises (MSMEs) and Startups. These items include strategically critical Line Replacement Units (LRUs), systems, sub-systems, assemblies, sub-assemblies, spares, components and raw materials.
- Implementation: The list is available on the SRIJAN portal of the Ministry of Defence, which provides a platform for DPSUs and Service Headquarters (SHQs) to propose defence related items for indigenisation by private industries. DPSUs such as Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Bharat Dynamics Limited (BDL) and others have initiated the process of issuing Expressions of Interest (EoI) and tenders or Request for Proposal (RFP).
- Impact: Indigenisation of these items is expected to lead to import substitution worth Rs 1,048 crore. This initiative provides assurance to the domestic defence industry, thereby encouraging them to develop defence products without the risk of competition from imports.
- Future Goals: The Ministry of Defence aims to continue expanding the list every year till the year 2025, thereby further increasing the number of items to be indigenised.This incremental approach supports the long-term goal of achieving greater self-reliance in defence production.
Positive Indigenisation List
- The Positive Indigenisation List is a list of items that the Indian Armed Forces can procure only from domestic manufacturers, including the private sector or DPSUs.
- The concept was introduced in the Defence Acquisition Procedure (DAP) 2020, with a focus on import substitution for major systems, platforms, weapon systems, sensors and warheads.
- The list covers a diverse range of critical items to strengthen India’s defence capabilities and promote self-reliance in the defence sector.
Progress
- The first Positive Indigenisation List was promulgated in August 2020, followed by successive lists, resulting in a total of 4,666 items.
- So far, 2,972 items worth Rs 3,400 crore in import substitution value have been indigenised.
- These five lists for DPSUs are in addition to the five positive indigenisation lists of 509 items notified by the Department of Military Affairs (DMA). These lists include highly complex systems, sensors, weapons and ammunition.
- Over 36,000 defence items have been offered for indigenisation by industries, of which over 12,300 items have been indigenised in the last three years. As a result, DPSUs have placed orders worth Rs 7,572 crore to domestic vendors.
What is the need for defence indigenisation in India
- Import dependence: Despite continuous efforts to strengthen its defence-industrial base, India has remained the world’s largest arms importer. Between 2019 and 2023, the country’s share in total global arms imports was 9.8%, reflecting its strategic vulnerability in defence procurement.
- Strategic autonomy: Heavy dependence on foreign arms imports compromises India’s strategic autonomy. By indigenising defence production, India can ensure self-reliance in critical defence technologies while reducing dependence on external sources. Dependence on foreign arms can pose risks during geopolitical tensions. Indigenous production can boost national security by ensuring uninterrupted supply and availability of defence equipment during crises. A self-reliant defence industry boosts India’s political leverage in international relations. It strengthens India’s position in global negotiations and defence cooperation.
- Economic benefits: Indigenisation supports the domestic economy by creating jobs, promoting innovation and stimulating industrial growth. It reduces foreign exchange outflows, thereby contributing to economic stability. Indigenous production can be more cost-effective in the long run. It can reduce procurement costs, maintenance and logistics challenges associated with importing arms from abroad.
- Sustainable development: Indigenisation promotes sustainable development by ensuring that the defence industry develops in harmony with national interests and environmental considerations.