India could axe pending defence buys from abroad as in-principle call to stop all imports triggers massive review

Agni-5 is most advanced missile in the Agni series with new technologies incorporated in it in terms of navigation and guidance, warhead and engine. It has a range of over 5000 km. (Reuters)

The Defence Ministry has been carrying out a massive review since the last month of all its ongoing and planned global procurement cases, after an in-principle call to stop further import of defence equipment was taken in an internal meeting in December chaired by Defence Secretary Ajay Kumar, News18.com has learnt.

Highly placed sources in the government told News18.com that this directive comes ahead of a Defence Production and Export Promotion Policy drafted by the Defence Ministry, and after a meeting between the ministry and the Prime Minister’s Office last month. The Defence Ministry’s internal meeting was held subsequently.

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Aside from these two meetings, multiple meetings have taken place within the ministry in the last few weeks to discuss all Buy-Global procurement cases, to identify which are mandatory and which could be shelved. One of the meetings is also scheduled on Wednesday to review ongoing and planned foreign procurements.

A top government source said that the review of all planned foreign procurements is being carried out by the ministry and will be discussed in a special meeting, which is yet to be scheduled, of the Defence Acquisition Council (DAC). The DAC is headed by Defence Minister Rajnath Singh.

“Additionally, all ongoing foreign procurement cases are also being reviewed and defence equipment which will mandatorily have to be imported will be placed before a DAC meeting this month,” the source said.

A second source in the government told News18.com that there are also plans to amend the Defence Acquisition Procedure (DAP) in the future to ensure that foreign procurements are initiated only in the rarest of instances, that too after getting special exemption from the DAC.

The DAP is the manual governing all capital procurements for the armed forces. It was amended as early as November 2020.

“In fact, the PMO has also insisted on only indigenous items for emergency procurements. Only the Defence Minister can grant an exception to this,” the source said.

Sources in the government said that discussions are also on to ensure the domestic private defence industry gets a level-playing field.

This, the sources added, could be by way of devising qualitative requirements suited to domestic capabilities and giving larger orders to the Indian private defence industry as well as initiating procurement of items under the two positive indigenisation lists and a set of proposed reforms in the Defence Research and Development Organisation (DRDO).

Also on the cards in the aid of completely cutting off foreign defence imports, is reducing foreign procurements by Defence PSUs and reducing dependence on foreign Original Equipment Manufacturers (OEMs) for spares and other crucial components.

The Defence Ministry has taken a series of steps to boost the indigenisation of the defence sector with the aim of making it self-reliant in the last two years.

Efforts towards this include two positive indigenisation lists since August 2020, detailing more than 200 items which will have to be mandatorily procured from indigenous sources.

Moreover, under the capital acquisition budget for 2021-22, the Defence Ministry earmarked around 64% of its modernisation funds for only domestic procurements.

Similarly, a large number of Requests for Information and Requests for Proposals floated by the defence services in the last few months were directed to the domestic sector, including those for special winter clothing for troops and loitering munitions for the Army’s artillery units.

Many of the contracts for procurement of various drones have been signed with Indian firms.

However, the latest review in the ministry comes after the PMO gave an ultimatum of stopping foreign procurements in the immediate future, barring exceptions.

Senior defence officials said that while this directive will give further impetus to Atmanirbharta (self-reliance) in defence programme, a few planned acquisitions that were in the advanced stage face risk of being axed.

“For instance, the pending deals for the Igla-S Very Short Range Air Defence (VSHORAD) systems and the Kamov-226T Light Utility helicopters from Russia as well as a number of aircraft and guns which were planned to be procured from foreign vendors stand the risk of getting shelved post review,” an official said.