Growth Drivers of Defence Manufacturing

Defence Production Policy, 2011 paved way for indigenous manufacturing of defence equipment and Defence Procurement Procedure (DPP) has been amended in 2016 to provide for the following:

New category of capital procurement - IDDM (Indigenously Designed, Developed and Manufactured) introduced to encourage indigenous design, development and manufacturing of defence equipment.

Preference to ‘Buy (Indian-IDDM)’, ‘Buy (Indian)’ and ‘Buy and Make (Indian)’ over ‘Buy (Global)’ categories of capital acquisition. Clear and unambiguous definition of indigenous content.

Defence products list for industrial licensing, has been articulated wherein large numbers of parts/components, castings/ forgings etc. have been excluded from the purview of industrial licensing. The MAKE procedure, which aims to promote research & development in the industry with support from the government and the placement of orders, has been promulgated with provision for 90% funding by Government and preference to MSMEs in certain category of projects.