Domestic defence procurement gets separate budget provision 

#GS3 #Economy 

Govt. to bring out negative import list for weapons and military platforms 

  • The government would make a separate budgetary provision for domestic defence procurements and bring out a negative import list for weapons and military platforms. 
  • Every year, this list will be increased as the capacity to make weapons that meet the necessary standards grows.  
  • Indigenisation of some imported spares will also be given priority, ‘Make in India’ was absolutely necessary for self-reliance, especially in critical sectors such as defence production. 
  • While some of the state of the art weapons required by the Services would be met through imports, some that were produced in the country and met the standards have to be procured locally only.  
  • The negative list would be worked out in consultation with the Department of Military Affairs headed by the Chief of the Defence Staff. 
  • The limit for Foreign Direct Investment (FDI) in defence through the automatic route had also been raised from 49% to 74%.  
  • Earlier, 100% FDI was allowed on a case by case basis. 
  • However, two industry observers said the real impact of the increased FDI limit had to be analysed. 

Much needed step 

  • The Confederation of Indian Industry (CII) called the measures a much needed step for reducing imports and building self-reliance in defence.  
  • The stress laid on domestic manufacturing is very encouraging as India today is among the largest importers in the world of defence equipment.  
  • The list of non-importable items and corporatisation of OFB are some landmark steps and will boost the confidence of domestic manufacturers. 
  • The increase in FDI limit to 74% would attract foreign funds into this sector, along with technology infusion. 
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