19-July-2024-Special-Article

FIFTH POSITIVE INDIGENISATION LIST (PIL) OF MINISTRY OF DEFENCE

India’s Ministry of Defence (MoD) has recently notified the fifth Positive Indigenisation List (PIL), which includes various defence items aimed at promoting self-reliance and reducing dependence on imports.

This initiative is a significant step towards enhancing the domestic defence sector and ensuring national security.

Concurrently, the need for a comprehensive internal security plan has become paramount as India’s global stature and economic strength grow.

Key Highlights of the Fifth Positive Indigenisation List (PIL)

Purpose and Scope:

• The fifth PIL comprises 346 items aimed at advancing Aatmanirbharta (self-reliance) in defence and reducing import dependence by Defence Public Sector Undertakings (DPSUs).
• Guarantees that these items are sourced solely from the Indian industry, including Micro, Small, and Medium Enterprises (MSMEs) and startups.
• Items include strategically important Line Replacement Units (LRUs), systems, sub-systems, assemblies, sub-assemblies, spares, components, and raw materials.

Implementation:

• The list is available on the MoD’s Srijan portal, providing a platform for DPSUs and service headquarters (SHQs) to offer defence items for indigenisation to private industries.

• Defense Public Sector Undertakings (DPSUs) such as Hindustan Aeronautics Limited (HAL), Bharat Electronics Ltd (BEL), Bharat Dynamics Ltd (BDL), and others have begun the process of issuing Expressions of Interest (EoIs) and Requests for Tenders or Proposals (RFPs).

Impact:

• The indigenisation of these items is expected to have an import substitution value worth Rs 1,048 crore.

• Gives confidence to the domestic defense industry, motivating them to create defense products without the threat of competition from imports.

Future Objectives:

• The Ministry of Defence plans to expand the list each year until 2025, thereby increasing the number of items to be indigenized.
• This incremental approach supports the long-term goal of achieving greater self-reliance in defence production.

Positive Indigenisation List (PIL)

About:

• The PIL is a list of items that can only be purchased by the Indian armed forces from domestic manufacturers, including the private sector or DPSUs.
• Introduced in the Defence Acquisition Procedure (DAP) 2020, focusing on import substitution for major systems, platforms, weapon systems, sensors, and munitions.

• Includes a wide array of items essential for enhancing India’s defense capabilities and fostering self-reliance in the defense sector.

Progress:

• The first Positive Indigenisation List (PIL) was introduced in August 2020, followed by additional lists, culminating in a total of 4,666 items.
• To date, 2,972 items, with an import substitution value of Rs 3,400 crore, have been indigenized.
• These five lists for DPSUs are in addition to the five positive indigenisation lists of 509 items issued by the Department of Military Affairs (DMA).
• Over 36,000 defense items have been made available to the industry for indigenisation, with over 12,300 items indigenized in the past three years.
• Consequently, the DPSUs have placed orders worth Rs 7,572 crore on domestic vendors.

Status of Indigenisation in the Defence Sector

Rise in Exports:

• In FY 2023-24, defence exports reached a record Rs 21,083 crore (approx. USD 2.63 Billion), showing a 32.5% increase from the previous fiscal year.
• Over the last 10 years, there has been a 31-fold increase in defence exports compared to FY 2013-14.
• The private sector and DPSUs have contributed about 60% and 40% respectively to this growth.
• This growth is attributed to policy reforms, ‘Ease of Doing Business’ initiatives, and digital solutions provided by the Government to promote defence exports.

Achievements:

• The Indian defence sector has seen the production of several advanced systems, including the 155 mm Artillery Gun ‘Dhanush’, Light Combat Aircraft ‘Tejas’, INS Vikrant: Aircraft Carrier, and various other platforms and equipment, notably the Advanced Towed Artillery Gun (ATAG) howitzer.

Reduction in Import Dependency:

• The expenditure on foreign defence procurement has decreased from 46% to 36% over the past four years, demonstrating the impact of indigenisation efforts in reducing reliance on imports.

Growth in Domestic Procurement Share:

• The share of domestic procurement in total defence procurement has risen from 54% in 2018-19 to 68% in the current year, with 25% of the defence budget allocated for procurement from private industry.

Value of Production:

• The value of production by public and private sector defence companies has increased from Rs 79,071 crore to Rs 84,643 crore in the past two years, reflecting significant growth in the sector’s capacity and output.

Initiatives Related to Indigenisation in the Defence Sector

Defence Procurement Policy (DPP), 2016:

• DPP 2016 introduced the “Buy-IDDM” (Indigenous Designed and Manufactured) Developed category of acquisition and accorded it the topmost priority.
• This policy shift is designed to enhance local production capabilities and reduce import dependency.

Defence Acquisition Procedure (DAP) 2020:

• Aims to promote Atmanirbhar Bharat Abhiyaan in the defence manufacturing sector.
• Includes features such as PIL, priority to indigenous procurement, reservation for MSMEs and small shipyards, increased indigenous content, and the introduction of new categories to promote ‘Make in India’ initiative.
• Focuses on the indigenisation of imported spares to enhance self-reliance through import substitution.

Industrial Licensing:

• The licensing process has been streamlined with extended validity, facilitating easier investment in the defence sector.

Foreign Direct Investment (FDI):

• The FDI policy now allows up to 74% under the automatic route, promoting foreign investment in defence manufacturing.

Make Procedure:

• Promotes indigenous design, development, and manufacturing of defence equipment.
• Involves both public and private sectors to build indigenous capabilities.

Defence Industrial Corridors:

• Two corridors, in Uttar Pradesh and Tamil Nadu, have been established to attract investments and build a comprehensive defence manufacturing ecosystem.
• Investments totaling approximately Rs 6,089 crore have been made in these corridors.

Innovative and Supportive Schemes:

• Mission DefSpace: Launched to advance space technology for defence applications.
• Innovations for Defence Excellence (iDEX): Supports innovation in defence by engaging start-ups, MSMEs, and research institutions. The ‘iDEX Prime’ framework offers up to Rs 10 crore in grants for high-end solutions.
• SRIJAN Portal: Facilitates indigenisation by listing previously imported items for local production. So far, 4,006 items have attracted interest from the Indian industry.
• Research and Development (R&D): 25% of the R&D budget is allocated for industry-led R&D, fostering technological advancement and innovation in the defence sector.

Way Forward

National Security Doctrine (NSD):

• India should have a NSD to address internal and external challenges.
• The NSD will guide policy decisions and strategic actions, reducing ad-hoc responses and improving coherence in handling security issues.

Internal Security Ministry:

• The Ministry of Home Affairs is too heavy and unwieldy, leading to delayed and inadequate attention to internal security matters.
• It is time to appoint a young, junior minister to independently handle internal security.

Recent Issues in Jammu and Kashmir:

• Despite claims of reduced terror incidents, recent attacks show the situation is still volatile.
• The government needs to reorganize the security grid, restore statehood to J&K, and hold elections for the Assembly.

Stabilizing the Northeast Region:

• The region continues to face challenges despite the Prime Minister’s attention.
• The government needs to ensure strict implementation of ceasefire agreements and prevent rebel activities.
• Address issues like illegal migration, drug trafficking, and arms smuggling with a comprehensive approach.

Naxal Problem:

• The national policy and action plan have led to a significant decrease in left-wing extremism violence.
• With Naxals on the backfoot, the government should offer a unilateral cease-fire and persuade them to negotiate and integrate into mainstream society.

Intelligence and Investigation Agencies:

• The Intelligence Bureau and the Central Bureau of Investigation (CBI) need restructuring.
• The IB should be given a statutory basis to prevent misuse of intelligence for political gain.
• Strengthen the CBI in terms of legal mandate, infrastructure, and resources.

Reforming State Police Forces:

• Transform state police from “Ruler’s Police” to “People’s Police” to enhance public trust and effectiveness.

• Implementing global best practices can modernize and enhance policing standards.

Central Armed Police Forces (CAPFs):

• Address internal issues like unplanned expansion, inadequate training, and declining discipline standards.
• Appoint a high-powered commission to address these problems for long-term solutions.

Technology:

• Incorporate technological advancements to benefit the police.
• Set up a high-powered technology mission to recommend the latest technologies for addressing current and future challenges.

Conclusion

The fifth Positive Indigenisation List marks a significant step towards strengthening India’s self-reliance in the defence sector. While indigenisation efforts are poised to enhance defence capabilities and domestic production, addressing internal security challenges, including regional instability and systemic reform, remains crucial for maintaining national cohesion and stability. As India advances, combining these elements will be essential for strengthening its global standing and internal stability.

Mains Question:

1. Discuss the significance of the fifth Positive Indigenisation List (PIL) by the Ministry of Defence in promoting self-reliance in India’s defence sector and its impact on national security. (250 words)