Fighter planes, air-to-surface missiles in India’s ₹45,000-cr defence push

In a fresh push for self-reliance in the defence manufacturing sector, India on Friday gave preliminary approval to the purchase of military hardware worth ₹45,000 crore including new fighter planes, missiles, light armoured multipurpose vehicles, integrated surveillance and targeting systems, and survey ships to modernise its armed forces.

The defence acquisition council (DAC), which initiates purchases based on the needs projected by the armed forces, approved the acquisition proposals of the three services under two of the most important categories for indigenisation under the Defence Acquisition Procedure — Buy (Indian-IDDM) and Buy (Indian). IDDM stands for indigenously designed, developed and manufactured.

The weapons and systems will be bought from Indian vendors, giving a substantial boost to the domestic defence Industry, the defence ministry said in a statement.

India has set aside a portion of its defence budget to buy locally made military hardware. Around ₹1 lakh crore was set aside for domestic procurement in this year’s budget, compared to ₹84,598 crore, ₹70,221 crore and ₹51,000 crore in the three previous years.

The proposals cleared by DAC at its meeting chaired by defence minister Rajnath Singh include the purchase of 12 Sukhoi-30 MKI fighter jets and associated equipment worth ₹11,000 crore from state-run planemaker Hindustan Aeronautics Limited (HAL), officials aware of the matter said. The fighters will be bought as replacements for the 12 Su-30 MKIs lost in accidents. India had contracted 272 Su-30-MKIs from Russia of which 222 aircraft were licence-built by HAL.

The council also green-lit the purchase of Dhruvastra short-range air-to-surface missiles for the advanced light helicopters (Mk-IV) and integrated surveillance and targeting systems to meet the needs of the mechanised forces.

The next-generation survey vessels and avionics upgrades for Dornier aircraft were also cleared.

The light armoured multipurpose vehicles and integrated surveillance and targeting systems will enhance protection, mobility, attack capability and survivability of the mechanised forces, the statement said. High mobility towing vehicles for swift mobilisation and deployment of artillery guns and radars were also approved.

The Buy (Indian-IDDM) category covers the acquisition of military hardware from Indian vendors, with a minimum of 50% indigenous content on cost basis of the base contract price.

“Rather than a threshold of 50% indigenous content for IDDM projects, we should aim for a minimum 60-65% indigenous content,” Singh said. The minister directed the chief of defence staff, the three service chiefs, defence secretary and the director general (acquisition) to work towards increasing the minimum indigenous content in consultation with the local industry.

The Buy (Indian) category refers to the acquisition of weapons and systems that may not have been designed and developed indigenously but have an indigenous content of 60% on the cost basis of the base contract price.

India has taken many measures during the last four to five years to boost self-reliance in defence, including the creation of a separate budget for buying locally made military hardware, imposing a series of phased import bans, increasing foreign direct investment from 49% to 74% and improving ease of doing business.

In May, India announced that the value of defence production in the country crossed ₹1 lakh crore for the first time on the back of key reforms to spur growth in the sector. The figure stood at ₹1,06,800 crore in FY 2022-23 compared to ₹95,000 crore in FY 2021-22 and ₹54,951 crore five years ago. India is eyeing a turnover of ₹1,75,000 lakh crore in defence manufacturing by 2024-25.

India has thus far published four positive indigenisation lists that have imposed a phased import ban on 411 different types of weapons and platforms including light-weight tanks, naval utility helicopters, artillery guns, missiles, destroyers, ship-borne cruise missiles, light combat aircraft, light transport aircraft, long-range land-attack cruise missiles, basic trainer aircraft, airborne early warning and control systems, and multi-barrel rocket launchers.

These lists were announced during the last three years — in August 2020, May 2021, April 2022 and October 2022. The import ban covers military hardware that is expected to be indigenised during the next five to six years. Import substitution of ammunition, which is a recurring requirement, has been given special emphasis in these lists.