New Delhi: India Monday notified the second defence negative import list, now called the ‘Positive Indigenisation List’ of 108 items, which included light helicopters with single engines, next generation Corvettes, Airborne Early Warning and Control (AEW&C) systems, mini UAV for surveillance and anti-material rifles among others.
This is the second list issued after the government came out with a list of 101 negative import lists in August last year.
A negative import list is a boost for domestic industries as it details all the military equipment that the government won’t import in the future.
Of the 108 items in the second list, the cut-off date for 49 of those is December 2021.
The major ones on the list are light medium and heavy combat armoured vehicles for the infantry, helicopter launched anti-tank guided missile (ATGM) for up to 7 km, mission systems for AEW&C, single engine land variant helicopter weighing less than 3.5 T among others.
While the list is exhaustive, industry sources, while welcoming the initiative, pointed out that most of the items on the list are already manufactured in the country and many systems have not been imported in years, including the single-engine light helicopter and the corvettes besides others.
Jayant D Patil, President, society of Indian Defence Manufacturers (SIDM), said “The second Positive Indigenisation List is another testament of the confidence placed by the Government and the Armed Forces on the Industry to deliver cutting-edge Defence Technology for India’s security requirements”.
The defence ministry in a statement said the second list lays special focus on weapons or systems that are currently under development/trials and are likely to translate into firm orders in the future.
“Not only does the list recognise the potential of the local defence industry, it will also invigorate impetus to domestic Research & Development by attracting fresh investment into technology and manufacturing capabilities,” it said.
It added that this second list has been prepared by the defence ministry after several rounds of consultations with government and private manufacturing industry confederations to assess if future capabilities of the Indian industry will be able to meet requirements of the armed forces.
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Industry hopeful, foreign players skeptical
Industry sources pointed out that they are expecting some of the projects in the pipeline to be included in the third list whenever it is out.
“Most of the items on the list are already manufactured in India. But the good thing is that more and more items are being added to the list. It is important because it is an assurance of orders,” a source who did not wish to be identified said.
He added that it will help the armed forces and the industry to build confidence in each other.
Another source agreed and said the list makes it binding for the armed forces to place even a second order on an Indian firm because in many cases foreign companies can bid lower and swing the contract, especially in the electronics segment.
One of the sources cited above said the industry is really looking forward to an order list rather than just an import negative list.
“The biggest question is where is the order? The industry is really looking at knowing the proposed order list,” the source said. “If the MoD says it has reserved Rs 70,000 crore or Rs 75,000 crore to be spent on indigenous production this financial year, it will need a pipeline of Rs 5 lakh crore since payments are done in batches. The industry wants to know where this pipeline is so that they know what RFP is coming out and when orders will be issued.”
A leading foreign defence player in the Indian market said that the list is “protectionist” and “not a good idea”.
“The way forward as we see it is to tie up with Indian firms. The negative list will only lead to India playing catch up with global firms whereas the focus should be on building technology for the future and emerge as a foreign OEM (original equipment manufacturer) for the world,” the source said. “I agree that Indian industry needs help, which should be provided, but make it a level playing field also.”
Below is the full list:
(Edited by Arun Prashanth)