Foreign Procurement By The Defence Services

Posted On: 07 FEB 2022 4:36PM by PIB Delhi

Details of expenditure incurred on Foreign Procurement under Capital Acquisition head for modernisation of the Defence Services from Financial year 2014-15 to 2021-22 are as under:

(Rs. In Crore)

Year	Foreign Procurement	Foreign Procurement as % age of total  Capital Acquisition Head
2014-15	25,980.98	39.45
2015-16	23,192.23	37.20
2016-17	27,278.09	39.45
2017-18	29,035.42	39.92
2018-19	36,957.06	48.68
2019-20	38,156.83	41.89
2020-21	42,786.54	36.00
2021-22*	29,658.14	39.44

* Upto December 2021

From the above table, it may be observed that component of the Foreign Procurements under this head has been progressively decreasing since 2018-19.

The government has taken several policy initiatives in past few years under ‘Make in India’ Program and brought reforms to encourage indigenous design, development and manufacture of defence equipment in the country, thereby reducing dependence on imports in coming years. Further, Defence Acquisition Procedure (DAP) 2020 and other policy initiatives have focused on boosting indigenous defence capability, reducing reliance on imports and promoting Aatmanirbhar Bharat. These initiatives, inter-alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020. Funds for Domestic Capital Procurement under Capital Acquisition Heads of Defence Services are also being earmarked from Financial Year 2020-21.  Some of the measures/initiatives taken are:

1. Notification of two ‘Positive Indigenisation lists’ for the Defence Services and one for Defence Public Sector Undertakings (DPSUs) for which there would be an embargo on the imports beyond the timeline indicated.
2. Introduction of a new category “Buy (Global –Manufacture in India)” to enable Foreign OEMs to set up Manufacturing facilities in India.
3. Make –III (newly introduced in DAP 2020) category to enable indigenisation of spares and import substitution.
4. Simplification of Make Procedure, Launch of Innovations of Defence Excellence (iDEX) scheme involving start-ups & Micro, Small and Medium Enterprises (MSMEs).
5. Revision of offset guidelines focused towards development of Defence ecosystem while giving incentives to Transfer of Technology (ToT) and Defence Manufacturing, encouraging MSMEs & Defence Industrial Corridors.
6. Reservation for MSMEs and small Shipyards on orders upto Rs 100 Cr/year.
7. System for incentivising the use of indigenous Military Material and Software to encourage indigenisation of military material and indigenous development of software for military use.

Details of indigenous production of defence and aerospace related items from 2014-15 to 2020-21 are as under:

S. No.	Financial Year	Total Annual Turnover (Rs in crore)
1	2014-15	Not available  *
2	2015-16
3	2016-17	74054
4	2017-18	78820
5	2018-19	81120
6	2019-20	79071
7	2020-21	84643

*   No compilation of data for 2014-15 & 2015-16 has been done.

This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Smt Priyanka Chaturvedi in Rajya Sabha on February 07, 2022.

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