The Government of India has approved a proposal to allow the private industry to manufacture selected ammunition for the Indian Army.
The request for proposal of the munition manufacturing project has already been issued by the government.
India’s Defence Production Policy focuses on attaining self-reliance in the design, development and production of equipment, weapon systems and platforms for the army.
In addition, the policy aims to provide suitable conditions for private industries across India to contribute to the country’s defence sector.
This will help strengthen the potential of small and medium enterprises (SMEs) supporting defence research and development. It will also fill the shortage of the Indian army’s critical ammunition.
As part of the government’s Make in India initiative, the Defence Production Policy introduced a new category of capital acquisition. It rules that locally designed equipment with a minimum of 40% local content, or other equipment with 60% locally sourced material will be considered for procurement.
In order to pursue the policy, the Indian Government has also taken other measures, including modifications in industrial licensing for the country’s defence sector.
Most components, parts, sub-systems, and testing and production equipment have been eliminated from the defence products list to remove difficulties SMEs may have meeting industrial licences.
Under the new policy, foreign investments in the country’s defence sector of up to 49% are permitted through an automatic process. Investments of more than 49% are processed by the government.