Article Posted on : - Aug 05, 2021

A file photo.

NEW DELHI (PTI): India spent a whopping Rs 2.02 lakh crore in the last three financial years on procurement of defence equipment from domestic firms as part of a larger policy initiative to boost indigenous defence manufacturing, according to details provided by the government on Wednesday.

The amount spent on the procurement between 2018-19 and 2020-21 included expenditure incurred under both capital and revenue heads.

Replying to a question in the Lok Sabha, Minister of State for Defence Ajay Bhatt said an amount of Rs 50,500 crore was spent in procuring defence equipment from domestic sources out of a total expenditure of Rs 93,474 crore in 2018-19.

The expenditure incurred on sourcing equipment from domestic firms went up to Rs 63,722 crore in 2019-20 out of total expenses of Rs 1,08,340 crore, while the amount in 2020-21 was Rs 88,632 crore.

The total expenditure on procurement under both capital and revenue heads in 2020-21 was Rs 1,39,341 crore, according to Bhatt.

The combined total spent on sourcing the items from domestic firms in the three years comes to Rs 2,02,854 crore.

Bhatt said the percentage of expenditure incurred on sourcing defence equipment from domestic sources out of the total allocation in 2018-19 was 54 per cent, while it went upto 58.8 per cent in 2019-20 and 63.3 per cent in 2020-21.

"The measures taken by the government for indigenisation are likely to result in import substitution," he said.

Bhatt said the details provided by him on expenditure by the three services were based on data received from the Controller General of Defence Accounts (CGDA).

In the last couple of years, the government has unveiled a series of reform measures and initiatives to make India a hub of defence manufacturing.

Last August, Defence Minister Rajnath Singh announced that India will stop the import of 101 weapons and military platforms like transport aircraft, light combat helicopters, conventional submarines, cruise missiles and sonar systems by 2024.

A second negative list, putting import restrictions on 108 military weapons and systems such as next-generation corvettes, airborne early warning systems, tank engines and radars, was issued recently.

In May last year, the government announced increasing the FDI limit from 49 per cent to 74 per cent under the automatic route in the defence sector.

The government has been focusing on reducing dependence on imported military platforms and has decided to support domestic defence manufacturing.

The Defence Ministry has set a goal of a turnover of USD 25 billion (Rs 1.75 lakh crore) in defence manufacturing by 2025 that included an export target of USD 5 billion (Rs 35,000 crore) worth of military hardware.