Defence Industry sector was opened up in May 2001 up to 100% for Indian private sector participation. Since the opening up of Defence sector till date, a total of 606 Industrial Licenses have been issued to 369 companies operating in Defence sector. Further in order to promote domestic production, the Government has taken several policy initiatives in past few years and brought reforms to encourage indigenous design, development and manufacture of defence equipment in the country. These initiatives, inter-alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020; Notification of four ‘Positive Indigenisation Lists’ of total 411 items of Services and three ‘Positive Indigenization Lists’ of total 3,738 items of Defence Public Sector Undertakings (DPSUs), for which there would be an embargo on the import beyond the timelines indicated against them; Simplification of Industrial licensing process with longer validity period; Liberalisation of Foreign Direct Investment (FDI) policy allowing 74% FDI under automatic route; Simplification of Make Procedure; Launch of Mission DefSpace; Launch of Innovations for Defence Excellence (iDEX) scheme involving start-ups & Micro, Small and Medium Enterprises (MSMEs); Implementation of Public Procurement (Preference to Make in India) Order 2017; Launch of an indigenisation portal namely SRIJAN to facilitate indigenisation by Indian Industry including MSMEs; Reforms  in  Offset  policy with  thrust on attracting investment and Transfer of Technology for Defence manufacturing by assigning higher multipliers; and Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu; Opening up of Defence Research & Development (R&D) for industry, start-ups and academia with 25 percent of defence R&D budget; Progressive increase in allocation of Defence Budget of military modernisation for procurement from domestic sources, etc.

The Government of India has established two Defence Industrial Corridors (DICs) in the country, one in the State of Uttar Pradesh and other in Tamil Nadu. In Uttar Pradesh Defence Industrial Corridor (UPDIC), six (06) nodes viz. Agra, Aligarh, Chitrakoot, Jhansi, Kanpur and Lucknow are identified.  Jhansi & Chitrakoot nodes are in Bundelkhand region. There is no proposal to set up any new Defence Industrial Corridor.

This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Shri Vishnu Datt Sharma and Shri Nama Nageswara Rao in Lok Sabha today.

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