Summary: The Defence Ministry has unveiled its fifth indigenisation list, aiming to substitute imports worth ₹1,048 crore with domestically produced items.
NEWS Defence Minister Rajnath Singh has underscored the importance of reducing India’s dependency on defence imports. In line with this strategy, on July 16, the government released the “fifth positive indigenisation list,” comprising 346 items. Check full list of 346 items and timeline of procurement here- https://static.pib.gov.in/WriteReadData/specificdocs/documents/2024/jul/doc2024716350001.pdf
These items, which include crucial line replacement units, systems, subsystems, assemblies, sub-assemblies, spares, components, and raw materials, will no longer be imported. Instead, they will be sourced from Indian manufacturers, as outlined by the Ministry of Defence in an official statement.
The cumulative “import substitution value worth ₹1,048 crore” highlights the significant economic impact of this move. The detailed list and timelines for indigenisation are available on the Srijan portal, emphasizing the shift towards self-reliance.
DPSU Stocks in Focus The fifth indigenisation list prominently features nine defence public sector undertakings (DPSUs), including Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Bharat Dynamics Limited (BDL), BEML Limited, India Optel Limited (IOL), Mazagon Dock Shipbuilders Limited (MDL), Goa Shipyard Limited (GSL), Garden Reach Shipbuilders & Engineers Ltd (GRSE), and Hindustan Shipyard Limited (HSL).
Despite this significant announcement, leading DPSU stocks experienced a downturn. By 1:46 pm, HAL shares had dropped 1.85% to ₹5,402.9, Bharat Dynamics fell by 1.73% to ₹1,600.5, BEL decreased by 1.1% to ₹327.75, and MDL was down 0.2% to ₹5,382.
The Defence Ministry has mandated that these DPSUs will indigenise the listed items through various approaches, including the ‘Make’ procedure and in-house development, involving industry players such as MSMEs. This initiative is expected to boost the economy, attract investment in defence, and reduce import dependency. It will also enhance the design capabilities of the domestic defence industry, involving academic and research institutions.
‘Aatmanirbharta’ in Defence In the past three years, the government has issued four indigenisation lists to promote ‘aatmanirbharta’ or self-reliance in the defence sector. These lists were published in December 2021, March 2022, August 2022, and August 2023.
The cumulative impact of these lists includes 4,666 items, with 2,972 already indigenised, amounting to an import substitution value of ₹3,400 crore. Additionally, the Department of Military Affairs (DMA) has released separate lists of 509 highly complex items for indigenisation, including systems, sensors, weapons, and ammunition.
As of June 2024, over 36,000 defence items have been offered for indigenisation by the DPSUs and Service Headquarters (SHQs), with more than 12,300 items indigenised in the last three years. Consequently, DPSUs have placed orders worth ₹7,572 crore with domestic vendors.
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