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August 7, 2018

India releases draft Defence Production Policy

The Indian Government has released a draft Defence Production Policy that is focused on promoting domestic development of defence design and production capabilities.

The Indian Government has released a draft Defence Production Policy that is focused on promoting domestic development of defence design and production capabilities.

The draft policy comes after the government made a proposal in this year’s budget to create an industry-friendly policy framework that encourages public sector, private sector and micro, small and medium enterprises (MSMEs) to produce defence equipment and technologies in the country.

It is now in public domain and the government has asked all relevant stakeholders to present their views.

Some of the key features listed in the draft policy include creation of a robust and competitive defence and aerospace industry as part of the government’s ‘Make in India’ initiative that stresses on domestic manufacturing.

The policy envisions the creation of a tiered defence industrial ecosystem in the country.

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The government also intends to reduce dependence on imports and make India a self-reliant developer and manufacturer of weapon systems.

“According to the news agency, the defence ministry is working on removing bureaucratic delays in key acquisitions, including ‘Make in India’ projects.”

Furthermore, the policy outlines measures such as Transfer of Technology or enhanced Foreign Direct Investment (FDI) for domestic production to offset lack of manufacturing capabilities in the country.

As per the policy, Ordnance Factory Board (OFB) is mandated to focus on system integration, design and development.

OFB has also been handed the assignment of actively involving domestic vendors in the private sector for other assembly work.

In a meeting with Confederation of Indian Industry (CII) representatives last month, Indian Defence Minister Nirmala Sitharaman was requested to resolve the issue of delays in the issuance of licences needed to start defence production, The Economic Times reported.

According to the news agency, the defence ministry is working on removing bureaucratic delays in key acquisitions, including ‘Make in India’ projects.

The government is also considering a mechanism that allows automatic approval of licences if the home ministry fails to provide security clearance within a ‘reasonable’ time.

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