Defence Equipment Manufacturing Industry ‘Preparing a Negative List for Imports’

· DAP 2020 provides Effective Framework to Encourage Industries take up Local Manufacturing

The domestic defence equipment manufacturing industry has set out to prepare a negative list for imports in line with the Defence Acquisition Procedure (DAP) 2020.

Sujith Haridas, Director-General, Society of Indian Defence Manufacturers (SIDM), said: “It is an early stage of the policy for promulgating Negative List. The Ministry of Defence (MOD) published one list of 26 items in June, which was mostly inputs for defence equipment and platforms, sourced by Ordnance Factories and Defence Public Sector Undertakings. MOD has already initiated the consultative process and sought suggestions from the industry associations.”

“SIDM has reached out to its membership. A comprehensive list has been collated and submitted to MOD. Having said that, a Negative List for imports for the defence sector will be required to address all parts of the value chain of defence weapon systems, platforms and even ammunition,” he said.

“Key raw materials, parts or components, sub-assemblies among others, will also get listed along with the complete weapon systems and platforms. The whole, tiered industry ecosystem needs to be addressed by the policy of import ban. Therefore, the industry is looking forward to a comprehensive criterion for preparing the Negative list, with a timetable for total ban on imports in the future,” Haridas said.

It is expected that a higher priority for Make in India categories for acquisition of all types of defence capabilities in DAP 2020 will provide support to boost domestic manufacturing. This, together with a Negative List, which will be updated periodically, will provide an effective framework to encourage as well enable Indian industries to undertake local manufacturing of weapons and even platforms.

Notable changes

Responding to a query on the notable changes in the Defence Acquisition Procedure (DAP) 2020 from the Defence Procurement Policy (DPP) 2020, Haridas said, “The new approach lays additional emphasis on establishing life cycle support for new systems and platforms, recognising the Life Cycle Costs, seeking comprehensive proposals for life cycle support along with that of the main system or platform. The DAP 2020 provides a framework for evaluating various options addressing long term, life cycle support through Long Term Supply Arrangements or Maintenance Contracts. Even a performance-based logistics type of arrangement is permitted to be made.”

Haridas said that a new category —Buy (Global – Manufacture in India) has been introduced. “This will enable outright purchase of equipment from foreign vendors, but with the condition that a minimum of 50 per cent indigenous content should be achieved in the manufacturing of either the entire equipment or spares, assemblies, sub-assemblies, Maintenance, Repair and Overhaul (MRO) facility for the equipment, through its subsidiary in India.”