FinFloww
FinFloww

@FinFloww

25 Tweets 3 reads May 15, 2024
India is the world’s largest arms importer, accounting for 9.8% of global arms imports
Every nation has been exploiting our huge defence budget
But to their utter SHOCK, India will stop importing ammunition by next year!
THREAD: How India will become ATMANIRBHAR in defence🧵
Do you know that our defense industry now possesses the capabilities to manufacture a diverse range of high-end necessities like
- State-of-the-art 155mm Artillery Gun system ‘Dhanush’
- Surface to Air Missile system ‘Akash’
- Helicopters like ‘Cheetah’ & ‘Dornier 228’
- Light Combat Aircraft ‘Tejas’
- Submarines like ‘INS Kalveri’ & ‘INS Khanderi’
- Integrated Air Command and Control System and finally
- all Made-in-India Advanced Towed Artillery Gun (ATAG) ‘Howitzer Gun’.
But do you have any idea that not that long ago we were reliant
on the US & Europe to get the specialized attire called — Extended Cold Weather Clothing System (ECWCS) for our Indian soldiers stationed in the world’s highest battlefield, Siachen Glacier!
It's a 3-layer modular clothing system engineered to withstand temp as low as -50°C.
Finally in 2022, one of our homegrown startups solved this problem and created the IP specializing in defense apparel.
Now consider, how were we intending to defend ourselves in the most volatile geopolitical landscape while depending on imports to meet our most basic needs?
Estimates suggest that India was importing approx 70% of its defense equipment & tech requirements from the Rest of the World in 2012
— which left India vulnerable & exposed the nation to supply chain disruption from time to time.
This is the reason why we decided a decade ago that we would double-down on the production of indigenous (domestically produced) equipment to become AtmaNirbhar in order to achieve strategic independence in the defense sector.
The Ministry of Defense (MoD) aims to reach a
— production target of $26B in Aerospace & Defense Manufacturing by 2025 including $5B worth of exports!
So to revitalize India’s arms production & reverse our import dependency, various reforms & initiatives were undertaken by the govt in last 10 years
Let’s take a look at it
1⃣ Establishment of Industrial Corridors
The govt has established 2 defense industrial corridors in Uttar Pradesh and Tamil Nadu to provide infrastructure & logistical support to defense manufacturers.
This will foster the conducive ecosystem for defense manufacturing, attract investments, and promote exports in the defense sector.
2⃣ Defense Acquisition Procedure (DAP)- 2020
DAP was renamed & revamped in 2020 from DPP- Defense Procurement Procedure to empower the Indian defense industry through Make in India initiative by laying down the strict order of preferences for procurement.
👉It enlist all weapons or platforms that got banned from imports like light weight tanks & transport aircraft, artillery guns, missiles etc.
👉It simplifies the categorization of defense procurement into 3 categories which includes the reservation for Indian vendors.
3⃣ Strategic Partnership (SP) Model
The SP Model aims to enhance the indigenous defense manufacturing of assets like submarines, fighter aircraft and helicopters by encouraging the participation of private sector co.s like Tata Group, L&T, Mahindra and Bharat Forge
— to compliment the already existing Defense Public Sector Undertakings (DPSUs) like Hindustan Aeronautics Ltd and Bharat Electronics Ltd.
See the participation of the private sector in defense production, requires government approval via an industrial licensing procedure.
So as of April 2023, the govt has issued 606 licenses to 369 co.s
Until 2001, the private sector in India was restricted from defense production.
However, by 2022-23, they had become a significant contributors, accounting for 20% of India's total defense production.
4⃣ Positive Indigenisation List (PIL)
This list outline specific defense equipment, component or tech that India aims to produce domestically instead of relying on imports.
We have indigenized 2500 items till May 2023 in 4 PILs which includes important Line Replacement Units.
5⃣ Launch of Innovations for Defense Excellence (iDEX)
Launched in April 2018, this scheme aims to foster innovation & tech development in defense & Aerospace by engaging industries including
— MSMEs, start-ups, individual innovators and R&D institutes.
As of January 2023, 14,000 MSMEs and 329 Startups are engaged in our defense production.
MoD has approved a budget of Rs.498.78 Cr for 5 years from 2021-26 under iDEX to provide financial support to these startups.
6⃣ Defense Offset Policy
This Policy requires foreign co.s that sell military equipment to India to invest some of the money they earn, back into India's Defense & Aerospace Industries.
This is helping our country to improve our ability to produce military equipment & tech.
By doing this, we’re aiming to become less reliant on other countries for our defense needs, boost our own defense manufacturing, and even sell our military equipment to other friendly nations.
7⃣ FDI Policy
The story doesn’t end here. To promote exports, 74% FDI through Automatic Route and 100% FDI through Govt Route has been liberalized as well.
This step has been taken to attract foreign co.s to set up their manufacturing units and tech transfer agreements.
And now these are the reasons why Indian Army is planning to stop all imports of ammunition from the next financial year.
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