The Union Defence Ministry has decided to earmark around 64 per cent of its modernisation funds under the capital acquisition budget for 2021-22 — a sum of over Rs 70,000 crore — for purchases from the domestic sector.
This marks an increase from 2020-21, when a capital budget allocation for domestic vendors was first made. At 58 per cent, this came to an amount of Rs 52,000 crore.
The announcement for 2021-22 was made Monday by Union Defence Minister Rajnath Singh at a seminar on defence budget organised by the Society of Indian Defence Manufacturers (SIDM), an association representing domestic industry players. It is part of the Modi government’s larger push to make India — currently the world’s second biggest arms importer — self-reliant in the field of defence.
In his address, Singh also spoke about widening the ‘negative import list’, which lists items that India seeks to stop buying from other countries. In 2020, the government listed 101 items — including weapons systems and assault rifles — and specified an indicative date by which the import embargo will kick in for each of them.
Singh said discussions are underway on including certain spares in the list.
Announcing the increase in allocation for purchases from domestic defence vendors, Singh said “it will have a positive impact on enhanced domestic procurement, having a multiplier effect on our industries including MSMEs and start-ups … and also increase employment in the defence sector”.
Experts in the field say the decision is a welcome step towards encouraging Atmanirbhar Bharat (self-reliant India) and ‘Make in India’