Capital procurement of Defence equipment is carried out as per Defence Acquisition Procedure (DAP 2020) with a focus on “Atmanirbhar Bharat” i.e “Self-Reliance” wherein indigenisation, innovation and import substitution have been facilitated through various schemes to build a robust ecosystem based on domestic industry including Micro, Small and Medium Enterprises (MSME). One of the key objectives of Make in India initiative of the Government is to bring MSMEs and Start-ups into the defence supply chain and thereby boost self-reliance.

The Government has taken several policy initiatives for promotion of MSMEs in defence and some of the DAP provisions enabling participation of MSMEs/Start-ups are as under:

• Reservation of delegated cases with AoN cost up to Rs 100 crores for MSMEs, provided there are at least two or more MSMEs eligible to participate in the category.

• Relaxation of financial parameter for recognised Start-ups/MSMEs.

• Waiver of EMD requirement from recognised Micro and Small Enterprises (MSEs).

• Relaxation in financial eligibility criteria for MSMEs for MAKE-1 projects.

• Setting up Innovations for Defence Excellence (iDEX) initiative under the Defence Innovation Organisation (DIO) and Technology Development Fund (TDF) under DRDO to use a multipronged approach and engage a large pool of innovators/technocrats/professionals/academicians including amongst the smaller enterprises, start-ups and MSMES, to foster innovation in a coherent, strategized, and integrated manner.

• The Defence Offset guidelines have further paved the way for proactive participation of MSMEs of India by incorporating a scheme of multipliers of 1.5 for engaging MSME as Indian Offset Partners (IOP), which promotes their integration in global supply chain.

 

During the last five financial years (2018-19 to 2022-23), 239 capital acquisition contracts have been signed for procurement of defence items/equipment. Out of which, 168 contracts accounting for 68% of total contracts value have been signed with Indian vendors including MSMEs. Year-wise details of capital contracts signed with domestic vendors are as under:

 

S No	Year	No of contracts
1	2018-19	30
2	2019-20	38
3	2020-21	34
4	2021-22	30
5	2022-23	36

 

This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Shrimati Poonam Mahajan and Ms Ramya Haridas in Lok Sabha today.

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