Defence Ministry’s ‘Atmanirbhar Bharat’Push: Import Embargo on 101 Items

Announcing a series of far-reaching reforms for the defence sector, taking to Twitter, Defence Minister Rajnath Singh said “the Ministry of Defence has prepared a list of 101 items for which there would be an embargo on the import beyond the timeline indicated against them. This is a big step towards self-reliance in defence”. These measures are on the lines to promote indigenous weapons over expensive foreign makes to boost indigenisation of defence production under ‘Atmanirbhar Bharat’ initiative.

Eying on contracts worth Rs 4 lakh crore

In a series of tweets, Defence Minister made some major announcements and said that following the embargo on certain defence imports, it is estimated that contracts worth almost Rs. 4 lakh crore will be placed upon the domestic industry within the next 6 to 7 years.

“The list is prepared by MoD after several rounds of consultations with all stakeholders, including the Armed Forces, public and private industry to assess current and future capabilities of the Indian industry for manufacturing various ammunition & equipment within India. Almost 260 schemes of such items were contracted by the Tri-Services at an approximate cost of Rs 3.5 lakh crore between April 2015 and August 2020. It is estimated that contracts worth almost Rs 4 lakh crore will be placed upon the domestic industry within the next 6 to 7 years,” Singh posted on the micro-blogging site.

Items worth almost Rs 1,30,000crore for Army, Air force, and 1,40,000 crore for Navy

“Of the total, items worth almost Rs 1,30,000 crore each are anticipated for the Army and the Air Force while items worth almost Rs 1,40,000 crore are anticipated by the Navy over the same period, the Minister announced.

“The list also includes, wheeled Armoured Fighting Vehicles (AFVs) with indicative import embargo date of December 2021, of which the Army is expected to contract almost 200 at an approximate cost of over Rs 5,000 crore,” he added.

Embargo on imports till 2024

Continuing to provide details, Singh said: “The embargo on imports is planned to be progressively implemented between 2020 to 2024. Our aim is to apprise the Indian defence industry about the anticipated requirements of the Armed Forces so that they are better prepared to realise the goal of indigenisation.” He added, “All necessary steps would be taken to ensure that timelines for production of equipment as per the Negative Import List are met, which will include a co-ordinated mechanism for handholding of the industry by the Defence Services.”

More equipment for import embargo

The Defence Minister said that more such equipment for import embargo would be identified progressively by the DMA in consultation with all stakeholders. “A due note of this will also be made in the DAP to ensure that no item in the negative list is processed for import in the future,” he said.

Separate budgetary head for domestic capital procurement

In an important step, the MoD has bifurcated the capital procurement budget for 2020-21 between domestic and foreign capital procurement routes. A separate budget head has been created with an outlay of nearly Rs 52,000 crore for domestic capital procurement in the current financial year.

“MoD has also bifurcated the capital procurement budget for 2020-21 between domestic and foreign capital procurement routes. A separate budget head has been created with an outlay of nearly Rs 52,000 crore for domestic capital procurement in the current financial year,” Singh added in his tweet.

Better opportunity to indigenous defence industry

The announcements are on the lines of the decision of Modi government which was pronounced on 16 May by Finance Minister NirmalaSitharaman in which she said the government would make separate budgetary provisions for procuring Indian made defence equipment to help reduce the defence import bills as well as to give a booster dose to Make in India scheme a super success post-COVID-19 pandemic. She also informed that the government would come out with a negative list of weapons that can be banned from imports.

Echoing Prime Minister Narendra Modi’s12 May clarion call for a self-reliant India based on the five pillars, i.e., Economy, Infrastructure, System, Demography and Demand and announced a special economic package for Self-Reliant India named ‘Atamnirbhar Bharat’, Defence Minister also said that the “decision will offer a great opportunity to the Indian defence industry to manufacture the items in the negative list by using their own design and development capabilities or adopting the technologies designed & developed by DRDO to meet the requirements of the Armed Forces.”

The list is prepared by MoD after several rounds of consultations with all stakeholders, including  Army, Air Force, Navy, DRDO, Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and private industry to assess current and future capabilities of the  Indian industry for manufacturing various ammunition/weapons/platforms/equipment within India.

Meanwhile, the Indian industry has welcomed the government’s announcement. In a statement, Bharat Forge Chairman Baba Kalyani said “The Kalyani Group welcomes announcement by the honorable Union Minister, Rajnath Singh. This strategic step will accelerate the Atmanirbhar Bharat narrative and bolster Indian defence equipment manufacturing industry. The growth of the domestic industry especially the MSME sector will lead to self-reliance, reduced expenditure on imports, saving of foreign currency, creating job opportunities, revival of consumption and ultimately getting us closer to the common goal of 5 trillion economy. We are committed and will support the Indian Government to achieve the goal.”

Here is the first of 101 Defence Weapons/Platforms Recommended for Import Embargo with effect from December 2020

With Effect From Dec 2021

Dec 2022 Onwards

Ravi Shankar