India Fast Facts

India’s embargo on 101 defence equipments

by | Aug 10, 2020 | In the news, Uncategorized | 0 comments

On Sunday morning of August 9, the Indian Defence Minister, Mr Rajnath Singh announced an import embargo on 101 defence equipment to be implemented in phases from 2020 to 2024. This is seen as a major step towards making India ‘Atmanirbhar’ or ‘Self Reliant’, save on valuable foreign exchange and bolster the domestic defence manufacturing industry. The announcement comes a few days after India released a new Defence Production and Export Promotion Policy 2020 (DPEPP 2020). The policy identified defence manufacturing as one of the key strategies to kickstart the overall economy.

This move is expected to bring in contracts worth an estimated $53 billion to the domestic industry over the next seven years in addition to $7 billion which the Defence ministry had already allocated for purchase from the domestic industry in 2020. India’s current defence budget per year is $70 billion, which is likely to reach $112 billion by 2027.

The domestic defence industry comprising both state run and private companies like Bharat Electronics, Bharat Dynamics Limited, Hindustan Aeronautics and Bharat Forge, are likely to get these contracts. This embargo provides an opportunity for these companies to manufacture equipment using their own design and development capabilities or adopting technologies designed by the Defence Research Development Organisation (DRDO). DRDO is a research and development organisation under the Ministry of Defence.

The announcement implies that India will have to compulsorily develop the listed technology for defence systems and platforms expecting more investments by technology partners into India.

Apart from small items like bullet proof equipment, ammunition and small arms, the list also has sophisticated items like light combat helicopters, wheeled armored vehicles, corvettes, sonar systems, radars, artillery guns and assault rifles. More such equipment for import embargo is expected to be identified by the government in future along with putting in place a system for promoting the domestic industry.

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