Defence manufacturing rules eased

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Mains Paper 3: Economy | Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

From UPSC perspective, the following things are important:

Prelims level: Particulars of the SPG

Mains level: Indigenization of defence manufacturing


News

Opening up for Private Players

  1. The government issued a notification last week simplifying the process for approval of manufacturing of a range of defence and aerospace equipment and components by private industry.
  2. It is to be done by bringing them under the licensing authority of the Department of Industrial Policy and Promotion (DIPP).

Warships included

  1. Items are listed in three categories — defence aircraft, warships of all kinds, and allied items of defence equipment.
  2. The most significant aspect is that warships of all kinds, surface and sub-surface, have been included in the listing.
  3. The industrial licensing has been terminated for ‘parts and components of the equipment’ which would benefit the small and medium enterprises (SMEs).

Foreign manufacturers

  1. This move is also expected to help foreign Original Equipment Manufacturers (OEM) looking for partnerships with the private sector.
  2. The Defence Ministry has also formulated an ambitious Strategic Partnership (SP) model under the Defence Procurement Procedure (DPP).

Back2Basics

Navigate to this page for more readings on SP Model in defence manufacturing:

Leg-up for private sector participation in defence equipment manufacturing

Make in India: Challenges & Prospects
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