MoD makes exemption for import of items notified in ‘Positive Indigenisation Lists’

Panel to be constituted under Chairmanship of the Chief of Defence Staff

The Defence Ministry has made a provision to grant exemption to the Services for the import of equipment and systems on the ‘Positive Indigenisation Lists’ or the negative import list in certain cases. This will be reviewed by the Defence Indigenisation Committee (DIC) to be constituted under the Chairmanship of the Chief of Defence Staff (CDS).

“In the event the domestic industry is not able to supply equipment in the stipulated time-frame, quantity, or where there are inadequacies in the equipment affecting safety of troops, or in case of any other technical issues, such as no valid response to a Request For Proposal (RFP), etc. specific cases for import could be taken up to meet immediate requirement, based on the recommendations of DIC,” according to the guidelines issued by the DMA.

“These Guidelines will be applicable prospectively with effect from the date of issuance,” the notifications dated November 02, 2021 states. It was put out by the MoD on November 24.

To oversee the implementation of the List an empowered monitoring committee, DIC will be constituted under the Chairmanship of Secretary DMA with members drawn from all stakeholders, the guidelines state.

As part of efforts to boost the domestic defence industry and promote defence exports, in August 2020 the Government notified first negative import list of 101 items and in May this year notified the second list comprising of 108 items and renamed the ‘positive indigenisation list’.

The DIC will also be responsible for reviewing progress of listed equipment, systems, platforms, weapons and to apply correctives where required so as to ensure that the listed items translate into production and developmental orders.

The guidelines further state that the import restriction will only be applicable to the fully-formed equipment, systems, platforms, weapons included in the List and not to its constituent sub-systems, assemblies and components (other than those mentioned in the List), which may have to be imported, subject to the condition that the fully formed equipment, system, platform, weapon has minimum 50% indigenous content in accordance with Defence Acquisition Procedure 2020.

It is expected that the Indian industry will invest in Research and Development (R&D), such that the items once placed in the indigenous List “will be upgraded along with advancement in global technologies, failing which the specific items could be recommended to DIC for review and removal from the List,” the guidelines added.