Indigenisation of Defence: DAP 2020 and Positive Indigenisation List (PIL)

What’s in today’s article?

• Why in News?
• What is a Positive Indigenisation List (PIL)?
• The DAP 2020
• Other Indian Government’s Efforts to Encourage Indigenisation of Defence
• News Summary Regarding 4th PIL for DPSUs

Why in News?

• To promote ‘Aatmanirbharta’ in defence and minimise imports by Defence Public Sector Undertakings (DPSUs), the Ministry of Defence has approved 4th Positive Indigenisation List (PIL).

What is a Positive Indigenisation List (PIL)?

• The concept of a PIL was introduced under the Defense Acquisition Procedure (DAP) 2020.
• Under the list, the Army, Navy, and Air Force will only procure the listed items from domestic manufacturers – DPSUs or players from the private sector.

The DAP 2020:

• The DAP 2020 [erstwhile Defence Procurement Procedure (DPP) – first initiated in 2002 and reformed in 2016] has been established as a potential catalyst for the Atmanirbhar Bharat Abhiyaan, in the sector of defence manufacturing.
• It aims to ensure timely acquisition of military equipment, systems and platforms as required by the Armed Forces with the highest degree of probity, public accountability, transparency, fair competition and level-playing field.
• It eases the procurement and acquisition of upgraded technology, products and services for the Tri-Services and other allied defence services.
• Through its many improved features, it hopes to provide a boost to the Make in India efforts in the field – especially to MSME’s, with an ultimate aim to develop India as a global defence manufacturing hub.
• It will cover all Capital Acquisitions other than Works and Land undertaken by the Ministry of Defence.

Other Indian Government’s Efforts to Encourage Indigenisation of Defence:

• Simplification of industrial licensing process with longer validity period;
• Liberalization of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route; Simplification of Make Procedure;
• Launch of Mission DefSpace;
• Launch of Innovations for Defence Excellence (iDEX) scheme by involving Start-ups and MSMEs;
• Implementation of Public Procurement (Preference to Make in India) Order 2017;
• Launch of an indigenisation portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs;
• Reforms in Offset policy with thrust on attracting investment and Transfer of Technology for Defence manufacturing by assigning higher multipliers;
• Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu; Earmarking of 25% of R&D Budget for Industry led R&D;
• Progressive increase in allocation of Defence Budget of military modernization for procurement from domestic sources, etc.

News Summary Regarding 4th PIL for DPSUs:

• This fourth list is in continuation to the previous three PILs involving Line Replacement Units (LRUs)/Sub-systems/Assemblies/Sub-assemblies/Spares and Components.
• The 4th PIL includes 928 strategically-important items, with import substitution value worth Rs 715 crore.
• The DPSUs will undertake indigenisation of these items through different routes under ‘Make’ category and in-house development through the capabilities of MSMEs and private Indian industry.
• These will only be procured from the Indian Industry after the timelines indicated in the list, thereby providing impetus to the growth in economy, enhanced investment in defence and reduction in import dependence of DPSUs.
• In addition, this will augment the design capabilities of the domestic defence industry by involving academia and research institutions.
• The industry may look for Expression of Interest (EoIs)/Request for Proposal (RFPs) on the Srijan Portal – especially designed for this purpose and may come forward to participate in large numbers.

Q1) What is the Mission DefSpace?

The goal of Mission Defence Space (DefSpace) is to encourage technology development in space for defence applications by startups and young entrepreneurs through 75 Defence Space Challenges launched across various Department for Defence Production (DDP) initiatives. 

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Q2) What is the Innovations for Defence Excellence (iDEX)?

It is the flagship initiative of the Ministry of Defence (MoD), launched in 2018 to achieve self-reliance and foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, start-ups, individual innovators, R&D institutes and academia.

Source: MoD approves 4th Positive Indigenisation List for DPSUs | PIB