The Fourth Positive Indigenisation List: A Step Forward for India
The Positive Indigenisation List is a significant step towards achieving the government’s objective of self-reliance in defence production.
- Shayesta Nishat Ahmed
- August 24, 2023
The Positive Indigenisation List is a significant step towards achieving the government’s objective of self-reliance in defence production.
The complexity and interconnection of global supply chains has heightened the realisation of the need for supply chain resilience and self-reliance in production.
The defence indigenisation lists are expected to promote domestic arms manufacturing and reduce the burden of arms imports.
The success of the co-development-cum-production push in Defence Acquisition Procedure 2020 would depend on the commercial viability of the co-developed product, apart from overcoming a host of conceptual and procedural challenges.
While India is establishing a strong aviation ecosystem by bringing together all stakeholders including the government, DPSUs, tri-services, academia and industry partners, it is believed that private Indian industries will be the crusaders for the government in defence production, particularly in the UAV vertical.
The GFR 2017 permit individual ministries to issue detailed instructions to address the needs and complexities of procurement carried out by them. The question is whether those principles and rules come in the way of the Ministry of Defence evolving a more efficient procurement procedure that meets the armed forces’ aspirations.
The Ministry of Defence has taken significant steps in recent times to boost domestic defence manufacturing and increase the role of the private sector to reduce dependence on imports and achieve self-reliance.
There is a need to formulate a composite policy that focuses on indigenisation in high priority technology areas, shedding the notion that it must necessarily result in savings. A more modest and focussed mission-mode approach to indigenisation can produce better results.
Raising the FDI limit by itself may not enthuse the foreign investors as per the expectations. To make the defence sector more attractive for foreign investment, a whole lot of other related issues will have to be addressed by the government.
It would be helpful if MoD issues a formal order addressing the concerns expressed by various stakeholders about certain aspects of the negative list, especially its impact on projects that involve foreign OEMs and the purpose of bifurcating the capital budget.