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The DAC also granted the AoN for procurement of three additional Scorpene submarines under Buy (Indian) category which will be constructed by Mazagon Dock Shipbuilders Limited (MDL). The procurement of additional submarines, with higher indigenous content, will not only help in maintaining required force level and operational readiness of the Indian Navy, but also create significant employment opportunities in the domestic sector. It will also help the MDL in further enhancing its capability and expertise in submarine construction.

In addition, the DAC approved the proposal to lay down guidelines for achieving the desired indigenous content in all categories of capital acquisition cases. It will help in achieving ‘Aatmanirbharta’ in critical manufacturing technologies and life-cycle sustenance of defence platforms/equipment through indigenous manufacturing.

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The decision by the defence acquisition council (DAC), India’s top weapons procurement body, builds on the push for self-reliance in the defence manufacturing sector.

The council accorded its acceptance of necessity (AoN) for 225 BrahMos missiles, Shakti electronic warfare systems and 60 utility helicopters for the navy, around 300 advanced towed artillery gun systems (ATAGS) for the army, the long-range stand-off weapon for the Indian Air Force’s Sukhoi-30 fighters, and nine advanced light helicopters for the coast guard.

Under India’s defence procurement rules, the council’s AoN is the first step towards buying military hardware. The DAC’s clearance for the military hardware is under the most important category of acquisition for indigenisation under the defence procurement policy, or the Indian-IDDM category. IDDM stands for indigenously designed, developed and manufactured.

The government will spend the lion’s share of the money on boosting the navy’s capabilities. The BrahMos missiles, Shakti EW systems and utility helicopters for the navy are estimated to cost ₹56,000 crore, the defence ministry said.

“While the additional BrahMos missile systems will enhance the maritime strike capabilities and anti-surface warfare operations, the utility helicopters will multiply the operational readiness of the Indian Navy for search and rescue operations, casualty evacuation, and humanitarian assistance disaster relief. The EW systems will equip and modernise frontline warships to counter any action by the adversaries,” it said in a statement.

The 155mm/52-caliber ATAGS will be bought for the army along with high mobility and gun-towing vehicles, the ministry said. The Defence Research and Development Organisation (DRDO) began the ATAGS project in 2013 to replace older guns with modern ones. It partnered with two private firms, Bharat Forge Limited and Tata Advanced Systems Limited, for manufacturing the gun. It has a range of 48 km.

A prototype of the gun was used for the ceremonial 21-gun salute for the first time at the Independence Day function at Red Fort last year, along with British guns traditionally used for the event. In his speech, Prime Minister Narendra Modi made a special mention of the indigenous artillery gun as he called for furthering self-reliance in different sectors.

The DAC also cleared the development and production of medium speed marine diesel engines under the ‘Make-I category’ for the first time. “India is venturing into the development and manufacturing of such engines indigenously to achieve self-reliance and leverage the capabilities of the industry towards the goal of Aatmanirbhar Bharat,” the ministry said.

‘Make-I’ is category of capital acquisition in the Defence Procurement Procedure (DPP), and the cornerstone of the Make in India initiative that seeks to build indigenous capabilities through the involvement of both public and private sector.

‘Make-I’ refers to government-funded projects while ‘Make-II’ covers industry-funded programmes. Another sub-category under ‘Make’ is ‘Make-III’ that covers military hardware that may not be designed and developed indigenously, but can be manufactured in the country for import substitution, and Indian firms may manufacture such hardware in collaboration with foreign partners.

The DAC has so far granted AoN for capital acquisition in 2022-23 for projects worth over ₹2.71 lakh crore ($32.77 bn), of which 99% procurement will be done from the domestic industry, it added.

The latest DAC clearance comes on the back of the defence ministry signing on March 7 two separate contracts with Hindustan Aeronautics Limited (HAL) and Larsen & Toubro for 70 HTT-40 basic trainer aircraft and three cadet training ships, respectively, with the orders worth ₹9,900 crore set to boost self-reliance.

Apart from creating a separate budget for buying locally made military hardware, the government has taken a raft of steps to promote self-reliance in the defence manufacturing sector including increasing foreign direct investment (FDI) from 49% to 74%, and notifying hundreds of weapons and systems that cannot be imported.

At Aero India 2023, the defence minister announced that India had earmarked 75% of this year’s defence capital procurement budget for buying weapons and systems from local manufacturers, with the move aimed at unlocking new opportunities for achieving self-reliance targets and ramping up the country’s defence exports.

The share of the domestic sector in the defence budget was never higher. India set aside 68% of the military’s capital acquisition budget for making indigenous purchases in 2022-23, 64% in 2021-22, and 58% in 2020-21.

Around ₹1 lakh crore has been set aside for domestic procurement this year, compared to ₹84,598 crore, ₹70,221 crore and ₹51,000 crore in the three previous years.

Singh had earlier indicated that India could bring more weapons and systems under an import ban, and manufacture them in the country to give a new push to self-reliance. So far, four ‘positive indigenisation lists’ have barred the import of 411 weapons and systems.

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The Defence Acquisition Council (DAC) of the defence ministry accorded the approval for Acceptance of Necessity (AoN) for 24 Capital Acquisition Proposals.

Ministry of Defence said in a series of tweets, “These proposals include six for Indian Army, six for IAF, 10 for Indian Navy and two proposals for Indian Coast Guard for a total value of Rs 84,328 crores. It is pertinent to mention that 21 proposals, worth Rs 82,127 crores (97.4%), are approved for procurement from indigenous sources.”

The defence ministry said this unprecedented initiative of the DAC will not only modernize the Indian Armed Forces but also provide a substantial boost to the Indian Defence Industry towards the goal of Aatmanirbhar Bharat.

“AoNs accorded will equip the Indian Army with platforms and equipment such as Futuristic Infantry Combat Vehicles, Light Tanks and Mounted Gun System providing a quantum jump to Indian Army’s operational preparedness. Proposals approved also include procurement of Ballistic Helmets, with enhanced protection level, for our soldiers,” said the ministry.

The ministry said that the approvals accorded for the procurement of Naval Anti-Ship Missiles, Multi-Purpose Vessels and High Endurance Autonomous Vehicles will further enhance maritime strength giving a boost to the Indian Navy’s capabilities.

“The Indian Air Force will be further strengthened with enhanced lethal capabilities by induction of a new range of missile system, Long Range Guided Bombs, Range Augmentation Kit for conventional bombs and advanced surveillance systems. The procurement of Next Generation Offshore Patrol Vessels for the Indian Coast Guard will enhance surveillance capability in the coastal areas to new heights,” said the ministry.

The induction and procurement of these weapons will give India an edge against China and Pakistan in the rough terrain.

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In a statement 0n 6 June, the Ministry of Defence said the DAC, at a meeting chaired by Defence Minister Rajnath Singh, “accorded Acceptance of Necessity (AoN) for Capital Acquisition Proposals of the Armed Forces amounting to Rs 76,390 crore under ‘Buy (Indian)’, ‘Buy & Make (Indian)’ and ‘Buy (Indian-IDDM)’ categories”. This, it said, follows Prime Minister Narendra Modi’s “clarion call for ‘Aatmanirbharta’.”

The planned next generation corvettes will be the first time that the warships will be designed entirely by the Navy’s Directorate of Naval Design and executed by an Indian shipyard through a competitive bid — this means that the private industry will also be allowed to bid, unlike earlier when a shipyard was nominated. The new warships will eventually replace the Khukri and Kora class corvettes.

“For the Indian Navy, the DAC accorded AoN for procurement of Next Generation Corvettes (NGC) at an estimated cost of approx. Rs 36,000 crore. These NGCs will be versatile platforms for a variety of roles viz. surveillance missions, escort operations, deterrence, Surface Action Group (SAG) operations, Search & Attack and Coastal Defence. These NGCs would be constructed based on the new in-house design of the Indian Navy using the latest technology of ship building and would contribute to further the Government’s initiative of SAGAR (Security and Growth for All in the Region),” the Ministry said.

“For the Indian Army, the DAC accorded fresh AoNs for procurement of Rough Terrain Fork Lift Trucks (RTFLTs), Bridge Laying Tanks (BLTs), Wheeled Armoured Fighting Vehicles (Wh AFVs) with Anti-Tank Guided Missiles (ATGMs) and Weapon Locating Radars (WLRs) through domestic sources with emphasis on indigenous design and development,” it said.

“The DAC accorded AoNs for manufacture of Dornier aircraft and Su-30 MKI aero-engines by the Navratna CPSE M/s Hindustan Aeronautics Limited with focus on enhancing indigenisation, particularly in indigenising aero-engine material,” the Ministry said.

“In pursuance of the Government’s vision for digital transformation in Defence, ‘Digital Coast Guard’ project under ‘Buy (Indian)’ Category has been approved by the DAC. Under this project, a pan India secure network for digitising of various surface and aviation operations, logistics, finance and HR processes in Coast Guard will be established,” it said.

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As the Russia-Ukraine conflict renewed focus on India’s dependence on the former Soviet Union nation for weapons and ammunition, the government has moved to further promote its “Make in India” programme in the defence sector by lessening imports from foreign companies. It amended the Defence Acquisition Procedure (DAP) 2020 to make it mandatory to meet all modernisation requirements of the Indian Army, Navy and Air Force as well as the Indian Coast Guard with indigenously manufactured equipment “irrespective of the nature of procurement”.

“Import of defence equipment and sourcing from foreign industry of capital acquisitions should only be an exception and undertaken with specific approval of Defence Acquisition Council (DAC) or the Defence Minister,” according to a press release issued by the government in New Delhi. Defence Minister Rajnath Singh, himself, heads the DAC.

The Ministry of Defence (MoD) had earmarked 64 per cent of its Capital Acquisition Budget for domestic industry in the financial year (FY) 2021-22. It, however, surpassed the target and utilised 65.50 per cent of Capital Acquisition Budget for procurement of defence equipment indigenously manufactured in India.

The DAC also approved other amendments in the DAP 2020, including the one to dispense with the requirement of the Integrity Pact Bank Guarantee (IPBG) for domestic defence companies participating in a government procurement process. According to the amended procedure, the Earnest Money Deposit (EMD) would be taken as a bid security for all acquisition cases with Acceptance of Necessity (AoN) cost more than Rs 100 crore. The EMD will be valid for the selected vendor up to signing of contracts and returned to remaining vendors post declaration of selection.

“Post contract, Integrity Pact will be covered through the Performance Cum Warranty Bank Guarantee (PWBG). Further, as per extant Government of India policy, EMD is not required from Micro and Small Enterprises (MSEs),” stated the MoD, after acting on an advice from the Ministry of Finance to reduce the financial burden on the country’s defence industry.

The DAC also approved amendments in the DAP 2020 to encourage wider participation and broad base indigenous defence manufacturing sector in the country. The total order quantities in acquisition cases would be split between short-listed vendors, wherever viable. Further, the other technically qualified bidders, who would not be awarded the contract, would be issued a certificate by the defence services, indicating that the product had already been successfully trial evaluated, to facilitate vendors to explore other markets.

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