DAC approves arms procurement proposals worth Rs 28,732 crore

The Defence Acquisition Council (DAC) meeting under the chairmanship of Raksha Mantri Rajnath Singh, was held on 26 July 2022. Acceptance of Necessity (AoN) for Capital Acquisition Proposals of the Armed Forces amounting to Rs 28,732 crore were accorded by the DAC in this meeting under Buy (Indian IDDM) and Buy (Indian) categories giving a further boost to ‘Aatmanirbharta’ in Defence. 

Among the proposals approved by DAC in the meeting are three proposals of the Indian Army, viz. Guided Extended Range Rocket Ammunition, Area Denial Munition Type I and Infantry Combat Vehicle – Command have been designed and developed by DRDO. The total value of these three proposals is Rs 8,599 crore. Guided Extended Range Rocket Ammunition has the range of 75 kms with accuracy of 40 meters. The Aerial Denial Munition Type I Rocket Ammunition contains dual purpose sub munitions capable of neutralising both tanks and armoured personnel carriers as well as B vehicle entrenched troops. The Infantry Combat Vehicle – Command is equipped with technology to collect, disseminate, share and present real time information to commanders to facilitate quick decision making for execution of tasks.   

Considering the demand of enhanced protection against the threat of enemy snipers to our troops deployed along the Line of Control and in close combat operations in counter terrorism scenario, DAC accorded AoN for Bullet Proof Jackets with Indian Standard BIS VI level of protection. To combat the current complex paradigm of conventional and hybrid warfare and counter terrorism at the borders, AoN for induction of approx. four lakh of Close Quarter Battle Carbines for the Services has also been accorded by the DAC. This is set to provide major impetus to the small arms manufacturing industry in India and enhancing ‘Aatmanirbharta’ in small arms. 

 In the recent conflicts across the world, drone technology proved to be a force multiplier in military operations. Accordingly, to augment Indian Army’s capability in modern warfare, AoN for procurement of Autonomous Surveillance and Armed Drone Swarms has been accorded by the DAC under Buy (Indian-IDDM) category. 

The DAC also approved Navy’s proposal to procure upgraded 1250KW capacity Marine Gas Turbine Generator for power generation application onboard Kolkata class of ships through Indian Industry. This will give a major boost to indigenous manufacturing of gas turbine generators. 

In order to enhance the security in the coastal region of the country, the DAC also approved the proposal of procurement of 14 Fast Patrol Vessels (FPVs) for Indian Coast Guard under the Buy (Indian-IDDM) with 60% IC. 

 Weaponry manufacturing units

In order to promote ‘Make in India’ in defence sector, the Government has issued 584 Defence Licenses to 358 private companies for setting up of manufacturing units, including 107 licenses for weapon manufacturing. In addition, there are 16 Defence Public Sector Companies manufacturing various platforms & equipment for the Armed Forces.

  Self reliance in defence manufacturing

The Government has taken several policy initiatives in the past few years and brought in reforms to encourage indigenous design, development and manufacture of defence equipment in the country, thereby expanding the production of indigenous defence equipment. These initiatives, inter-alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020; Announcement of 18 major defence platforms for industry led design and development in March 2022; Notification of three ‘Positive Indigenisation Lists’ of total 310 items of Services and two ‘Positive Indigenisation Lists’ of total 2958 items of Defence Public Sector Undertakings (DPSUs) for which there would be an embargo on the import beyond the timelines indicated against them; 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 Innovations for Defence Excellence (iDEX) scheme involving start-ups & Micro, Small and Medium Enterprises (MSMEs); Implementation of Public Procurement (Preference to Make in India) Order 2017; Launch of an indigenization portal namely SRIJAN to facilitate indigenization 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;  and  Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu; Opening up of Defence Research & Development (R&D) for industry, start-ups and academia with 25% of defence R&D budget earmarked to promote development of defence technology in the country; Progressive increase in allocation of Defence Budget of military modernisation for procurement from domestic sources, etc.

With these actions of the Government, the expenditure on defence procurement from foreign sources which used to be 46% of the overall expenditure has reduced to 36% in the last four years i.e. 2018-19 to 2021-22.