India likely to introduce a second defence ‘import embargo’ list by the end of year as it chases down $5 billion in exports

• India is looking to introduce another list that will restrict the import of defence items.
  
• The second list will be aimed at creating more opportunities for Indian defence firms on both, the software and hardware, side of things.
  
• The Defence Ministry is hoping to turnover $25 billion in defence manufacturing within the next five years — including $5 billion worth of military hardware exports.
  

India’s Defence Ministry is currently working on a second import list that will restrict the import of arms and weapons into the country. ANI reports that the list is currently being discussed between the three legs of the armed forces and the Department of Military Affairs.

The new list is likely to come out by the end of the year as India marches towards its goal of exporting $5 billion worth of military hardware in the next five years.

The first list, which was released on August 9, has already put an ‘import embargo’ on 101 military items, which includes artillery guns, submarines, aircrafts and other smaller, but crucial, inputs. It also earmarks ₹52,000 core out of the total capital budget allocation for domestic capital procurement.

Similarly, the second list will also aim to create more opportunities for Indian defence firms on both the software and hardware side of things, according to ANI. And, while Indian companies will have more contracts come their way, the list should not impact any ongoing joint ventures of even the Strategic Partnership Model.

PM Modi doesn’t want to kick foreign companies from India
Prime Minister Narendra Modi asserts that the import ban is not a ploy to kick foreign firms out of India but to create a co-production model supported by joint ventures. India’s ask is that they tie-up with local firms to produce within the country, looking at its market size.

“It is a win-win situation for everyone including the public sector, private sector and foreign companies. The government is committed to providing a better eco-system for this,” Modi said during a seminar on self-reliance in defence on August 27 organised by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Many questions remain
India is currently the third-biggest military spender in the world, behind only the US and China, as of 2019, according to data by the Stockholm International Peace Research Institute (SIPRI). Over 60% of India’s military requirements are currently met through imports.

On Monday, the Defence Research and Development Organisation (DRDO) made a detailed presentation to Defence Minister Rajnath Singh, identifying 108 military sub-systems and components that Indian private companies that build in-house, according to THE WEEK. To make that happen, the DRDO will provide support over the next couple of years.

However many questions remain since the total allocation to the armed forces, this year was already ₹59,416 crore less than what was asked for. For instance, will the bifurcation between domestic and foreign capital procurement routes of the budget be a permanent feature. And if so, how will the utilisation — and in some cases, the non-utilisation — of funds be dictated.

For now, what is clear, is that the Defence Ministry has set a goal to hit a turnover of $25 billion (₹1.75 lakh crore) in defence manufacturing within the next five years. Within its fold is an export target of $5 billion (₹35,000 crore) worth of military hardware.

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