India has directly paid over Rs one lakh crore to foreign firms for acquisition of equipment for the armed forces during the last five years, Defence Minister Manohar Parrikar said today.
The government, he said, constantly reviews the security scenario and accordingly decides to induct appropriate defence equipment.
This is a continuous process undertaken through procurement from various indigenous as well as foreign vendors to keep the armed forces in a state of readiness, he said, adding that procurement from indigenous vendors accounts for a significant share in capital acquisition.
"The total expenditure on direct payments to foreign vendors for capital acquisitions for the army, navy and air force during the last five years was Rs 103535.52 crore," he said in a written reply to Rajya Sabha.
Parrikar said that defence production policy focuses on greater self-reliance in defence production.
"Government has also raised the FDI limit in defence production from 26 per cent to 49 per cent and liberalised the licensing regime," he said.
The Defence Procurement Procedure 2013 lays emphasis on providing the desired boost to indigenous defence industry by mandating a higher preference to the 'Buy (Indian)', 'Buy & Make (Indian)' and 'Make' categorisation in capital procurement, the Minister said.
In a separate reply, Parrikar said acquisition of weapons and equipment for defence forces during the last 14 years was carried out as per the defence procurement procedure (DPP), as revised from time to time and as per long term integrated perspective plan (LTIPP), services capital acquisition plan and annual acquisition plan.
Capital procurements for defence are currently being progressed as per the current LTIPP (2012-27), he said.
Meanwhile, Minister of State for Defence Rao Inderjit Singh said DPP, 2011 aims at achieving substantive self- reliance in the design, development and production of equipment/weapon systems/platforms required for defence in as early a time-frame as possible.
It also aims at creating conditions conducive for the private industry to take an active role in this endeavour, enhancing potential of small and mediun enterprises (SMEs) in indigenisation and broadening the defence R&D base of the country.
In pursuance of this, he said the government has taken the major steps to promote the participation of private sector in the indigenous production of defence equipment.
Singh said that technology perspective and capability roadmap, which gives out the details of the equipment and technologies required by the armed forces, has been put in public domain to provide the industry an overview of the direction in which the forces intend to head in terms of capability in future.
The Minister said procedure for 'Buy and Make (Indian)' category has been further simplified in order to make the category more attractive for Indian defence industry.
A clear definition of indigenous content has been provided which would not only bring more clarity on the indigenous content required for difference categorization but also enhance the indigenisation in defence products in India, he said.
The Minister said Indian private sector industry has also been allowed to receive maintenance transfer of technology (MToT) in 'Buy (Global)' cases.
"FDI policy in defence sector has been reviewed and as per the new policy, composite foreign investment up to 49 per cent has been allowed through FIPB route and beyond 49 per cent with the approval of Cabinet Committee on Security (CCS)," he said.
