Defence Ministry earmarks 25% of domestic capital procurement budget for private industry to promote start-ups

To boost the Indian defence industry, govt earmarks 25 percent of the domestic capital procurement budget for purchases from Indian firms

PGurus Newsdesk

April 9, 2022

To boost the Indian defence industry, govt earmarks 25 percent of the domestic capital procurement budget for purchases from Indian firms

Govt reserves 25 percent of Rs.84,597.89 cr for domestic players

In a major boost to India’s domestic defence manufacturing, in line with the government’s Make in India programme, the Defence Ministry (MoD), on Friday said that 25 percent of capital acquisitions for the defence forces will be earmarked for domestic private industry.

Earlier, the Ministry of Defence had decided to earmark 68% of the capital procurement budget for the entire domestic industry during fiscal 2022-23. Accordingly, an amount of Rs.84,597 crores was allocated specifically for the domestic defence industry in the current financial year.

“To promote private industry, MSMEs, and start-ups in defence production ecosystem, 25% of the Domestic Capital Procurement/ Acquisition Budget, amounting to Rs.21,149.47 cr, will be earmarked for domestic private industry in FY2022-23,” the Defence Ministry said in a statement.

The MoD further added that in a bid to foster innovation and encourage technology development in defence, Rs.1,500 cr will be earmarked for procurement from start-ups, including iDEX Start-up, from within the allocations for Domestic Capital Procurement.

Earlier, Defense Minister Rajnath Singh released the third positive indigenization list of 101 items, comprising major equipment/ platforms notified by the Department of Military Affairs, Ministry of Defence (MoD) and lays special focus on equipment/ systems, which are being developed and likely to translate into firm orders in next five years. These weapons and platforms are planned to be indigenized progressively with effect from December 2022 to December 2027. These 101 items will, henceforth, be procured from local sources as per provisions of Defence Acquisition Procedure (DAP) 2020.

PGurus is now on Telegram. Click here to join our channel and stay updated with all the latest news and views

For all the latest updates, download PGurus App.