New Delhi: India’s new negative import list for defence systems, unveiled by Defence Minister Rajnath Singh Sunday, includes quite a few important items, such as assault rifles, snipers, light machine guns, wheeled armoured fighting vehicles (AFVs) and ultralight howitzers.
But it also misses out others like lightweight tanks and carbines, which could mean India ends up importing some products that are already available domestically, or are being worked upon.
The negative list has also thrown up some surprises, with the defence ministry stating that the Indian Air Force is looking at 123 Light Combat Aircraft Mark 1A, rather than 83, as earlier anticipated. Ministry sources said this is an indicated number for a period of five to seven years.
However, industry sources said the ministry is possibly adding up the 83 Mk1As with the 40 already ordered in the initial configuration, though they added that the figure mentioned for the deal, “over Rs 85,000 crore”, is steep.
Confusion and apprehension
Many foreign Original Equipment Manufacturers (OEMs) and even domestic players are confused on a number of issues and projects and are waiting for the finer details to come out to understand how India’s new procurement process will work.
This is because many of the items manufactured in the country, including the LCA, have foreign components whose technology is not available in India.
A study of the 101 items put in the negative list shows that over one-fourth of items are already manufactured in India and have not been imported for a long time, including a number of naval vessels and systems.
The items in the negative list include those which are exclusively manufactured in India and have no foreign options, including the LCA Mk1A and Light Combat Helicopters, both manufactured by the state-run Hindustan Aeronautics Limited (HAL).
There is also an increasing feeling that the majority of the contracts will actually end up going to defence PSUs and entities, leaving little for the private players.
What Army, Navy & Air Force will get
Giving details of the break-up of funds, the defence ministry said contracts worth almost Rs 4 lakh crore will be placed with the domestic industry in the next six to seven years.
Of these, items worth almost Rs 1,30,000 crore each are likely to be procured for the Army and the Air Force, while the figure for the Navy is almost Rs 1,40,000 crore.
The Navy is likely to procure submarines, with an indicative import embargo date — the date from which the import ban is to be in place — of December 2021. It expects to contract about six submarines at an approximate cost of almost Rs 42,000 crore, the ministry said. This is the long-pending P75I project, and the front-runners to bag this contract under the strategic partnership are state-run MDL and private player L&T.
For the Air Force, the ministry has decided to enlist the LCA MK 1A with an indicative embargo date of December 2020.
“Of these, 123 are anticipated at an approximate cost of over Rs 85,000 crore. Hence, there are highly complex platforms that are included in the list of 101 items,” the defence ministry said in a statement.
The ministry sources also sought to allay fears that since many systems have an embargo date of up to 2025, the armed forces will import all their demand by then, saying it is “incorrect to infer the same”.
“But operational requirements will always supersede any negative list. Even in small arms, the negative list has left out the 9mm and 5.56 mm carbines, even though they are available in India now,” an industry source said.
Another industry source pointed out that self-propelled guns and towed artillery are already manufactured in India, and that the mention of lightweight howitzers is a welcome step, because domestic players like Bharat Forge have already developed the systems.
Another important addition to the list is wheeled armoured fighting vehicles, which have an embargo date of December 2021.
The Army is currently looking to choose from three different vehicles, including the indigenous Tata Wheeled Armoured Protection, along with American Stryker Infantry Combat Vehicle, and Humvee.
This being put on the negative list could mean the contract will go to the Indian player, Tata.
The surprising misses from the list are the much talked about lightweight tanks and carbines.
The Army has shown interest in lightweight tanks and is involved in technical talks with Russia for its Sprut SDMI tanks. The miss is surprising because the DRDO is already working with private player L&T to make this tank, and a prototype is expected in the next 18 months.
On the procurement of carbines, the Army is likely to seal a contract with a UAE firm, much to the chagrin of domestic private firms who have come up with products of their own.
“If light machine guns and snipers can be put in the negative list, why can’t other small arms?” an industry source questioned.
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