Union Min: Rs 1,812 Cr FDI in Defence sector since 2014, 44 proposals approved under Make-II

New Delhi: 21 Defence offset contracts with a cumulative value of US$5.67 Billion approximately have been signed by Ministry of Defence (MoD) in last three years.

A study on the impact of offsets on Defence Industrial Base has been conducted by Department of Defence Production through Institute for Defence Studies and Analysis (IDSA).

According to this study, till March 2019, the MoD has signed 52 Offset contracts valued at US$11.79 Billion to be discharged through Indian Offset Partners.

In May 2001, the Defence Industry Sector, which was hitherto reserved for the public sector, was opened up to 100% for Indian private sector participation, with Foreign Direct Investment (FDI) up to 26%, both subject to licensing.

Further, Development of Industrial Policy & Promotion, Ministry of Commerce & Industry, has allowed FDI under automatic route up to 49% and above 49% through the government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.

Since the opening of private sector participation in Defence production in 2001, 452 Industrial Licenses (ILs) have been issued till October 2019 for manufacture of a wide range of Defence items, out of which a total of 109 licenses have been issued in the last 3 financial years.

Further, FDI amounting to Rs. 1,812 crores has been reported so far by companies in the Defence and Aerospace Sector since April 2014.

A separate procedure for ‘Make-II’ category has been notified under the Defence Procurement Procedure (DPP) to encourage indigenous development and manufacture of Defence equipment.

So far, 44 proposals for development by industry have been given ‘In-principle’ approval under Make-II.

This information was given by Union Minister of Defence Shripad Naik in a written reply to Dhairyasheel Sambhajirao Mane and others in Lok Sabha on 20 November.

Recently, at the ADMM-Plus Summit in Bangkok, Defence Minister Rajnath Singh had reaffirmed the Government’s committment to achieving a $26 billion Defence industry by 2025 with ‘Make in India’.

Earlier in November, Defence Minister Rajnath Singh was in Russia where he urged Russia to jointly manufacture Defence equipment with India. A day after that, Russia announced it would support the ‘Make in India’ initiative with plans to jointly manufacture Kalashnikov AK-203 rifles in India.

Singh also awarded Rs 3 crore to two startups earlier this month, saying innovation is key to self-reliance in the Defence sector.


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The ID Staff

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