Defence production policy in India was revitalised and amended in 2016 to encourage indigenous manufacturing of defence equipment as part of the Government’s ‘Make in India’ initiative. The amendments include the following:
- New category of capital procurement - Buy Indian - IDDM (Indigenously Designed, Developed and Manufactured) introduced to encourage indigenous design, development and manufacturing of defence equipment
- Preference to ‘Buy (Indian-IDDM)’, ‘Buy (Indian)’ and ‘Buy and Make (Indian)’ over ‘Buy (Global)’ categories of capital acquisition
- Clear and unambiguous definition of indigenous content
- Provision for Maintenance TOT (Transfer of Technology) to Indian Industry partners
- Provisions to allow foreign OEM (Original Equipment Manufacturer) to select Indian Production agency.
- The requirement of minimum indigenous content has been enhanced/rationalized
- What does this mean in terms of investment opportunities for the international industry?
This opening of the defence sector for private sector participation will help foreign OEMs to enter into strategic partnerships with Indian companies and leverage the domestic markets as well as aim at global markets.
Contractual offset opportunities are currently worth approximately USD 4.53 billion over the next 5-6 years.
SIDM and Defence IQ, A division of IQPC jointly organized the 'Armoured Vehicles India Conference on 26 & 27 June 2018 in New Delhi.