Defence Manufacturing

DPEPP 2020

Ministry of Defence (MoD) has formulated a draft Defence Production and Export Promotion Policy 2020 (DPEPP 2020) as guiding document of MoD to provide a focused, structured, and significant thrust to defence production capabilities of the country for self-reliance and exports.

Goals and Objectives of DPEPP 2020 are:

• To achieve a turnover of INR 1,75,000 Cr ($25Bn) including export of INR 35,000 Cr ($5 Bn) in Aerospace and Defence goods and services by 2025.
• To develop a dynamic, robust and competitive Defence industry, including Aerospace and Naval Shipbuilding industry to cater to the needs of Armed forces with quality products.
• To reduce dependence on imports and take forward "Make in India" initiatives through domestic design and development.
• To promote export of defence products and become part of the global defence value chains.
• To create an environment that encourages R&D, rewards innovation, creates Indian IP ownership and promotes a robust and self-reliant defence industry.

Focus areas of DPEPP 2020 are:

• Aero Engines: Focus on establishing an Aero Engine Complex for civil and military applications and developing core technologies for Aero Engines 
• Maintenance, Repair & Overhaul: Leverage favourable tax rationalization measures to promote MRO sector and enable convergence between Civil and Military MROs 
• Critical Technologies & Materials: List of Critical Technologies and Materials to be identified and R&D strategies to be developed to attain indigenization

DAP 2020

Formulation of DAP 2020 is aligned with the vision of the Government of Atmanirbhar Bharat. DAP 2020 lays down a strict order of preference for procurements. Weapons systems that are designed, developed, and manufactured in India are given higher preference. DAP 2020 has adequately included provisions to encourage FDI to establish manufacturing hubs both for import substitution and exports while protecting interests of Indian domestic industry.

Salient features of DAP 2020 are: 

• Reservation in Categories for Indian Vendors
• Enhancement of Indigenous Content      
• Rationalisation of Trial and Testing Procedures  
• Make & Innovation  
• Design & Development
• Industry Friendly Commercial Terms
• Offsets   

IDR Act

Defence Products list requiring Industrial Licences has been rationalised and manufacture of most of parts or components does not require Industrial License. The initial validity of the Industrial Licence granted under the IDR Act has been increased from 3 years to 15 years with a provision to further extend it by 3 years on a case-to-case basis.

STRATEGIC PARTNERSHIP MODEL

The Defence Acquisition Council (DAC) approved the broad contours of the Strategic Partnership Model (SPM) in its meeting held on May 20, 2017, under the chairmanship of the defence minister. 

• The policy is intended to engage the Indian private sector in the manufacture of hi-tech defence equipment in India.
• It is an establishment of long-term strategic partnerships with qualified Indian industry majors through a transparent and competitive process.
• The Indian industry partners would tie up with global OEMs (original equipment manufacturer) to seek technology transfers and manufacturing   know-how to set up domestic manufacturing infrastructure and supply chain.
• In the initial phase, strategic partners will be selected o the following segments:
• Fighter Aircraft.
• Helicopters.
• Submarines.
• Armoured fighting vehicles (AFV)/Main Battle Tanks (MBT)