Indian Handicrafts Industry & Exports

 

The handicrafts sector is of importance to the Indian economy as it is one of the largest employment generators and account for a significant share in the country’s export. The state and regional clusters contribute significantly to handicrafts export. The Indian handicrafts industry is fragmented with more than seven million regional artisans and over 67,000 exporters/export houses promoting regional art and craftsmanship in the domestic and global markets.

Key Markets and Export Destinations

Handicraft export from India decreased 3.35 per cent y-o-y during 2019-20 to reach US$ 3.53 billion. During this period, export of various segments stood as below:

• woodwares at US$ 761.02 million
• embroidered & crocheted goods at US$ 578.26 million
• miscellaneous handicrafts at US$ 1,003.57 million
• handprinted textiles and scarves at US$ 336.49 million
• imitation jewellery at US$ 220.97 million
• artmetal wares at US$ 452.22 million

Indian handicrafts are exported across geographies, with the top 10 destinations being the US, the UK, the UAE, Germany, France, Latin American countries (LAC), Italy, the Netherlands, Canada and Australia.

Recent Developments

Government of India increased incentive rates under the Merchandise Export from India scheme (MEIS) to seven per cent from five per cent for handicraft items which will help exporters to recover the input costs involved in the production of handicrafts and will lead to competitive pricing and boost export.

Export Promotion Council for Handicrafts

The Export Promotion Council for Handicrafts (EPCH) is the apex Government body and operates under the administrative control of the Ministry of Textiles, Government of India. EPCH has the distinction of being considered a ‘model council’, a self-sustaining body that self-finances all its promotional activities.

Handicraft exports from India increased by almost 2 per cent year-on-year to US$ 3.39 billion in FY20 (till February 2020).

Source:
Export Promotion Council for Handicrafts (EPCH)

LG Electronics sets up company-owned e-store in India, hopes to boost appliance sales

India’s largest home appliances maker, LG Electronics India has set up a company-owned online store front using the retail foreign direct investment (FDI) in automatic route for single brand companies and manufacturers.

The Korean-based firm believes that this move will help in expanding its sales further when Indian consumers are opting to buy products including television sets and refrigerators online due to the ongoing COVID-19 pandemic.

LG Electronics India business head (online and e-commerce) Mr Deepak Taneja said, “The company-owned e-store will focus on the premium-end products with an assortment of 150 models right now, but will eventually sell 60-70 per cent of its entire portfolio.”

“The entire buying process will be run and controlled by LG and we have tied up with logistic companies for last mile delivery from our warehouse. Online sales for us have grown by 100 per cent by value in the last one year while it has been 30-35 per cent for the industry,” he said.

Mr Taneja added that there would be no preferred or exclusive offers for its e-store and prices will be at parity with retail. “However, over a period of time we will look at differentiated offerings such as membership offers which LG has in few global markets like the US,” he said.

The company will not impact the end-consumer pricing, including the price offered by sellers in online marketplaces like Amazon and Flipkart, and retail stores.

Government to provide mobile connectivity in 354 villages which are located in strategic and border areas- Shri Ravi Shankar Prasad

 

Shri Ravi Shankar Prasad, Union Minister of Electronics & IT, Communications and Law & Justice, said that Government of India has been taking measures on priority to provide connectivity in the far flung, difficult, border areas of strategic importance, so as to ensure better quality of life to the people as well as to those who are working in these areas.

Speaking to media today after the inauguration of a submarine Optical Fiber Cable of length of 2300 kms between Chennai and Andaman Nicobar at a cost of Rs 1,224 crore (US$ 173.64 million), by Prime Minister Shri Narendra Modi.

Elaborating the various projects being implemented by Department of Telecommunications Shri Prasad spoke about various projects being implemented by the Department of Telecommunications to provide connectivity in remote and difficult areas Shri Prasad informed that a tender for 354 uncovered villages in the strategic, remote and border areas of the country has been finalised and is under implementation in 144 villages of the Union Territories of Jammu & Kashmir and Ladakh and remaining villages in the States of Bihar, Rajasthan, Uttarakhand, Himachal Pradesh and other priority areas of Gujarat. These villages have been strategically chosen to cover border area connectivity on mobile. After commissioning of these villages, there will be no uncovered villages in UTs of J&K, Ladakh for mobile connectivity. Satellite based DSPTs (Digital Satellite Phone Terminal) are also being provided at 1347 sites for Army, BRO, BSF, CRPF, ITBP, SSB etc. Out of which 183 sites are already commissioned and remaining are in process.

The Union Minister further told that Department of Telecommunications is also working on providing mobile connectivity in villages of 24 Aspirational districts of Bihar, Uttar Pradesh, Rajasthan and Madhya Pradesh and remaining 44 Aspirational Districts for 7287 uncovered villages in Chhattisgarh, Odisha, Jharkhand, Andhra Pradesh will also be covered for which government approval is under submission.

Studds commissions 2 new facilities in Haryana; invests Rs 200 crore in plants

 

Studds Accessories, a leading helmet manufacturing company, commissioned two new facilities at Faridabad in Haryana entailing total investment of Rs 200 crore (US$ 28.37 million). The company made an initial investment of around Rs 160 crore (US$ 22.70 million) to set up the largest helmet manufacturing facility in Asia, Studds Accessories said in a statement.

The plant is spread across an area of over 5.5 acres and will also produce bicycle helmets for domestic market besides motorcycle helmets, including the Shifter and Thunder series.

It has also commenced operations at another production unit which has in-house production line for expanded polystyrene (EPS), which is the most important safety feature in a helmet.

The second plant is spread across 1.5 acres and investment of Rs 40 crore (US$ 5.67 million) has been made, marking a total investment of over Rs 200 crore (US$ 28.37 million) in the manufacturing plants, Studds said.

"With the goal of expanding our production efficiency, our new plants would provide employment prospects for local citizens as well as add to the overall economic growth," Studds Accessories Ltd Managing Director Mr Sidhartha Bhushan Khurana said.

He added that the new plants will have production capacity of 75 lakh units of motorcycle helmets and 15 lakh bicycle helmets per annum.

The facilities will ensure direct employment for over 1,500 individuals, Mr Khurana said.

"Currently, we have just begun operations and are planning to ramp up production gradually. With the commencement of our new plants, we have doubled our production capacity from 7 million to 14 million units of motorcycle helmets," he added.

With these new manufacturing units, Studds now has four manufacturing factories in the country, all of them located in Faridabad, Haryana.

Export of helmets by the company is been done to more than 40 countries and the new plant is aimed at ramping up the exports.

Studds also plans to introduce a new range of exciting helmets in this financial year, it said.

Tata Projects completes 110 km Surathani-Phuket transmission line project in Thailand

Tata Projects, an infrastructure major, said it along with its consortium partner has completed 110-km stretch of the 200-km Surathani-Phuket transmission line project in Thailand.

This will provide additional electricity to Phuket and is passing through forests and mountainous terrains.

The statement released by company said, "Tata Projects Limited... and its consortium partner has completed an important 110-km stretch of the 200-km Surathani-Phuket transmission line project in Thailand. This 500kV transmission line is an achievement since it passes through thick jungles and mountainous terrain."

Out of the total 110-km stretch, about 80 km was completed by Tata Projects and the remaining by its partner, the company said adding that it used drone technology for stringing of transmission lines thereby reducing timeframe and avoiding manual work.

Though, no project cost was provided by the company.

Mr Vivek Gautam, COO – Tata Projects Ltd, said, "We are proud to complete this important transmission line project which is a true testimony of our top-notch expertise and vast experience. With successful completion of our second transmission line project in Thailand, we have once again proved our execution capabilities not only in India but also around the world."

It is expected that the company shall continue to deliver projects on-time, using world-class project management techniques and uncompromising standards of safety, he added.

Ready mixed concrete which is a symbol of 100 per cent concrete quality was used in construction of all tower foundations, the statement said adding, additionally, Tata Projects also prepared approach roads for ready mixed concrete trucks.

"A unique aspect of this project is that it is the first 500 kV transmission line passing from Phang-nga province. Phang-nga is a province in Southern Thailand, bordering the Andaman Sea on the West Coast of the Malay Peninsula," the statement said.

Before this Surathani-Phuket transmission line project, Tata Project-led consortium had successfully executed an 80-km stretch of 500kV Roi Et 2 – Chaiyaphum 2 Transmission Line project in August 2019. This was the company's first successfully executed transmission line project in Thailand.

The company claims expertise in executing large and complex urban and industrial infrastructure projects and operates through its four Strategic Business Groups (SBGs) namely Industrial Systems SBG, Core Infra SBG, Urban Infra SBG and Services SBG.

It also offers turnkey end-to-end solutions to set up power generation plants, power transmission and distribution systems, fully integrated rail and metro systems, commercial buildings and airports, chemical process plants, water and waste water management solutions, complete mining and metal purification systems.

Finance Minister launches an Online Dashboard for the National Infrastructure Pipeline

 Union Minister for Finance and Corporate Affairs Ms Nirmala Sitharaman inaugurated the National Infrastructure Pipeline (NIP) Online Dashboard here today through video conferencing.

The online dashboard is envisaged as a one stop solution for all stakeholders looking for information on infrastructure projects in New India. The dashboard is being hosted on the India Investment Grid (IIG) (www.indiainvestmentgrid.gov.in). IIG is an interactive and dynamic online platform that showcases updated & real-time investment opportunities in the country.

The inaugural was attended by members of the High-Level Task Force on Infrastructure and Secretaries of various ministries and government departments.

Speaking at the event, Ms Sitharaman said, “NIP will provide a boost to the vision of an Aatma Nirbhar Bharat. The availability of NIP projects on IIG will ensure easy accessibility to updated project information and attract investors for PPP projects. This is a great step in the direction of implementing NIP- giving a fillip to infrastructure development in the country”.

India Investment Grid (IIG) (www.indiainvestmentgrid.gov.in), is an interactive and dynamic online platform to showcase the best of investment opportunities in India to the global investor community. Developed and managed by Invest India, the National Investment Promotion and Facilitation Agency, IIG serves as the gateway to investments in India, and is also widely used by Indian missions and embassies across the world. IIG allows investors to:

• Search a pan-India database for investment opportunities across sectors
• Track the progress of preferred projects and indicate interest
• Directly communicate with project promoters

 In the budget speech of 2019-2020, Finance Minister Ms Sitharaman announced an outlay of Rs 100 lakh crore (US$ 1.41 trillion) for infrastructure projects over the next 5 years. The budget announcement followed the Independence Day speech by Hon’ble Prime Minister Mr Narendra Modi, wherein he highlighted that “For development of modern infrastructure, an amount of Rs 100 lakh crore (US$ 1.41 trillion) has been earmarked for this period which will create new job opportunities besides improving the living standards”.

In furtherance to this, a high-level Task Force submitted a final report on the National Infrastructure Pipeline with projected infrastructure investment of Rs 111 lakh crore (US$ 1.57 trillion) during FY 2020-25.

NIP is a first-of-its-kind initiative to provide world-class infrastructure across the country and improve the quality of life for all citizens. NIP will improve project preparation, attract investments (both domestic & foreign) into infrastructure, and will be crucial for attaining the target of becoming a US$ 5 trillion economy by FY 2025. NIP covers both economic and social infrastructure projects- based on the updated Harmonized Master List of Infrastructure.

Out of the total expected capital expenditure of Rs 111 lakh crore (US$ 1.57 trillion), projects worth Rs 44 lakh crore (US$ 624.20 billion) (40 per cent) are under implementation, projects worth Rs 33 lakh crore (US$ 468.15 billion) (30 per cent) are at a conceptual stage, projects worth Rs 22 lakh crore (US$ 312.10 billion) (20 per cent) are under development (project identified and DPR prepared, but yet to draw-down funds) and the balance projects worth Rs 11 lakh crore (US$ 156.05 billion) (10 per cent) are unclassified. The entire gamut of projects will now be hosted on IIG to provide visibility to NIP and attract investments from global & domestic investors.

The NIP project database under Volume III of the Final Report of the NIP Task Force is made available on IIG in order to provide access to updated project level information for investments across infrastructure sectors. The Digital platform will provide greater visibility to projects and achieve the mandate of the NIP to market the projects in an efficient manner. The NIP project database hosted on India Investment Grid (IIG) would provide visibility to the NIP and help in financing with prospective investors; domestic and foreign, able to access updated project level information. In addition, it is also a monitoring and evaluation tool to be used by the concerned ministries/departments and DEA to monitor the implementation and actual progress vis-à-vis initial estimates of the NIP for each project.

Ms Sitharaman has asked all concerned department/ministries to immediately update the status of projects on NIP portal and keep it updated in real time. She has also asked all concerned department/ministries to show concrete progress in terms of project and reforms implementation.

Prime Minister Shri Narendra Modi launches submarine cable connectivity to Andaman & Nicobar Islands (CANI)

Prime Minister Shri Narendra Modi today launched and dedicated to the nation, the submarine Optical Fibre Cable (OFC) connecting Andaman & Nicobar Islands to the mainland through video conferencing. The foundation stone for this project was laid by the PM on 30th December 2018 at Port Blair.

Prime Minister Shri Narendra Modi said the connectivity would now enable endless opportunities in the islands. He said the laying of the 2300 kilometer (kms) submarine cable and completing it before the set target is very praiseworthy.

The Prime Minister said that the service had begun today on a major chunk of the islands from Chennai to Port Blair, Port Blair to Little Andaman and Port Blair to Swaraj Island.

The Prime Minister admired the laying of cables for about 2300 kms under the sea as surveying in the deep sea, maintaining the quality of the cable and laying of the cable with specialised vessels is not an easy task. The project also had to overcome challenges such as high waves, storms and monsoons and the tough times owing to Corona Pandemic.

The Prime Minister said the Andaman & Nicobar Islands felt the need for years, but no steps were taken to fulfil it. Shri Modi expressed his happiness for being able to deliver the project notwithstanding such major challenges.

The Prime Minister said providing better and cheap connectivity to the people of Andaman & Nicobar Islands is the responsibility of the country. He congratulated all those who were associated with the project. Shri Modi said the Submarine Cable is one such effort to prove that A & N Islands are not far away from Delhi and from the Hearts of the Mainland.

 

Ease of Living to every Citizen

Shri Modi said that the Government is committed to provide modern facilities to every citizen and every sector so that there can be a better ease of living. He said this Optical Fibre Project which links A&N Islands with the rest of the country is an example of the commitment of the Government towards ease of living. He said the Government is committed to the speedy development of national security linked border areas and island states.

 

Increase Opportunities through Digital India

The Prime Minister said the Submarine Cable will help A&N in getting cheaper and better connectivity and all the benefits of Digital India, especially in improving online education, tele-medicine, banking system, online trading and in boosting tourism.

PM said that the Indian Ocean has been the center of India's trade and strategic prowess for thousands of years and that Andaman & Nicobar is an important centre for India’s Economic-Strategic Cooperation.

He said all the Islands of India would be playing an important role under India’s new trade strategy for Indo-Pacific region.

Shri Modi said under the Act-East policy, the role of Andaman and Nicobar in India's strong relations with East Asian countries and other countries connected to the sea is very high and is going to increase.

He said that the Island Development Agency was formed 3 years ago to strengthen its role. He said that the projects which were not completed in Andaman and Nicobar for years, are now rapidly getting completed.

 

High Impact Projects & Better Land, Air and Water Ways

PM said that High Impact Projects are being expanded in 12 islands of Andaman and Nicobar. Apart from providing for better internet and mobile connectivity, he said the effort is to further improve physical connectivity through road, air, and water.

The Prime Minister referred to the work on two major bridges and the NH-4 in order to improve the road connectivity of North and Middle Andaman.

He said the Port Blair Airport is being enhanced to handle a Capacity of 1200 passengers. Along with this the airports are ready for operations in Diglipur, Car Nicobar and Campbell - Bay.

Shri Modi said the Passenger Terminal in Swaraj Dweep, Shaheed Dweep and Long Island along with Water Aerodrom Infrastructure like Floating Jetty will be ready in the coming months.

He said that the 4 Ships being built at Kochi Shipyard shall be delivered soon to improve the Water connectivity between the islands and the mainland.

 

Port Led Development

He said Andaman & Nicobar will be developed as a hub of Port Led Development as it is at a Competitive Distance from many ports of the World.

Prime Minister said a country which has better network of ports and their connectivity will be able to provide a boost to trade in the 21st Century.

He said that today, when India is moving forward with the resolve of self-sufficiency and is establishing itself as an important player in the Global Supply and Value Chain, it is very important to strengthen our network of Waterways and our Ports. Shri Modi said that the legal bottlenecks in the development of Port Infrastructure are also being removed continuously.

 

International Maritime Trade

PM said that the Government's focus is also on promoting Ease of Business in the sea and simplifying Maritime Logistics. He referred to the speedy construction of the deep draft inner harbor and the proposal to construct Transhipment Port in Great Nicobar at an estimated cost of about Rs 10 thousand crore (US$ 14.19 billion). Shri Modi said this would enable big ships to anchor and would increase India’s share in maritime trade, along with new employment opportunities.

He said that the blue economy like Fisheries, Aquaculture and SeaWeed farming in the island will accelerate in commensurate with the modern infrastructure being developed in Andaman and Nicobar. He wished that the efforts of the Government will give Andaman and Nicobar, not only new facilities but also as a prominent place on the World Tourist Map.

Mr Piyush Goyal calls upon more buyers and sellers to join the GeM, which has proved to be a game-changer in government procurement; Fourth edition of the National Public Procurement Conclave inaugurated

 The Fourth edition of the National Public Procurement Conclave (NPPC), organized by Government e-Marketplace (GeM), in association with the Confederation of Indian Industry (CII) was inaugurated online by Mr Piyush Goyal, Minister of Commerce and Industry and Railways, to coincide with the anniversary of GeM Establishment Day. The theme of NPPC is “Technology enabled Government Procurement – Towards efficiency, transparency, and inclusiveness”.

Lauding the success of GeM in becoming a game changer in the Government procurement, Mr Goyal called upon more and more buyers and sellers to join the system. Expressing the confidence that GeM will be able to unlock the value and save money for the nation’s development, he said that it has helped in transparent, seamless, easy, efficient, and faster procurements. All the information is available at one place, and any outlier trying to manipulate the system can be easily identified. He said that the Government’s decision to ask the buyers to give interest for delayed payments in GeM is a significant step. At the same time, he also cautioned the unscrupulous sellers from pushing the poor-quality goods or charging exorbitant prices, as they will not only be blacklisted from the GeM portal but from the entire Government ecosystem.

Mr Piyush Goyal welcomed the offer from the CII to partner with GeM and expand the reach to the nook and corner of the country. He said that GeM has the advantage of being seamless, transparent, open, and efficient and technology-driven, and this will gain momentum if more and more buyers and sellers join the system.  More procurement orders will lead to more sellers joining it, leading to more competition, and availability of quality products at cheaper prices. “More the merrier”, said the Minister.

The Minister said that the Government has been making continuous efforts to reach out to all sections of the society, especially the marginalized ones, who were denied basic amenities for a long time. He said that the Government procurement is very large and has to be efficient. “Every penny saved is penny earned”, said the minister. The greater competition and efficiency help the Government save money, which is then used for the public good, and reach out to those who deserve this. Mr Goyal said that the Government has been bringing honesty and eliminating corruption. “Technology leads to Transparency which leads to Trust, which helps in Transformation of the country.  We have moved from Corruption to Clean Government which has raised the Confidence of people, and which is leading to greater Commerce within the country and internationally.”

The Minister said that as the television media’s success is measured by TRP ratings, the Success of GeM can be measured by Trust (Of people in government procurement), Reliability (In supply of quality products at low cost and timely manner) and Prosperity (of the nation and the people). He said that maximum efficiency comes from the minimum government, and e-process in procurement is a step in this direction.

The Minister announced that GeM and Indian railways are working earnestly to integrate the latter’s procurements with the former. He said that the railways presently spend about Rs 70,000 crore (US$ 9.93 billion) per annum on procurements and the integration of the system with the GeM will lead to saving of at least 10-15 per cent which is almost Rs 10,000 crore (US$ 1.42 billion). He said that besides savings of money, the integration will save efforts, manpower and bring in more efficiency and transparency in the system.

Mr Som Parkash, Minister of State in the Ministry of Commerce and Industry said that the Conclave provided an excellent opportunity to Buyers and Sellers to interact. He said Women Entrepreneurs, start-ups, Artisans, Weavers, Self-Help Groups and MSMEs will find such platforms very useful. He called for reduction of Government purchases from outside the Gem system.

Mr Talleen Kumar, CEO, GeM, said that GeM aims to enhance efficiency, transparency, inclusiveness in public procurement and provides the tools of Direct Procurement, e-Bidding, and Reverse Auction to facilitate buyers achieve the best value for their money. He said that GeM has evolved as an increasingly transparent, efficient, and inclusive platform, with MSMEs making up over 57 per cent of the cumulative Gross Merchandise Value on GeM. In order to provide an impetus to the Make in India initiative as part of the vision of “Aatmanirbhar Bharat”, and also to promote local products through the “Vocal for Local” initiative, the Government has made it mandatory for all sellers on GeM to list the Country of Origin while registering new products. Over the next couple of months, GeM shall be rolling out GeM 4.0 – which will be anchored in the Unified Procurement System.

The key features of this year’s online conclave include a detailed overview of the enhanced version of GeM – GeM 4.0, followed by virtual panel sessions on role of MSMEs, Start-ups, Women Entrepreneurs, Weavers and Artisans, Information Technology, Defense and Railways in Public Procurement. Some of the other highlights at NPPC 2020 include virtual B2B and B2G meetings between Govt buyers and sellers, training and technical sessions on GeM features and new developments, a virtual GeM stall to resolve queries on the spot and facilitate registration of sellers and buyers, special session for Services.

The Director General, CII Mr Chandrajit Banerjee also spoke on the occasion.

KVIC's Big Push to Khadi and Tourism in Arunachal Pradesh with the First Silk Training cum Production Center

 

The far-flung tribal village of Chullyu in Arunachal Pradesh will soon be bustling with spinning and weaving activities with Khadi and Village Industries Commission (KVIC) set to open the first of its kind Training cum Production Center of Silk in the state. Conceived just six months ago, the center will be launched in the first week of September. The KVIC has refurbished and converted a dilapidated school building into the training cum production center. The school building has been provided to KVIC by the education department of Arunachal Pradesh Government.

Machinery like handlooms, Charkha, Silk reeling machines and warping drums have already arrived, and installation of machines are in full swing. The first batch of 25 local artisans of Chullyu village has been selected to begin the training with.

The project was conceived in February this year during the visit of KVIC Chairman Mr Vinai Kumar Saxena to this tribal village Chullyu. Identifying a great potential of silk production and other activities of village industries in the village, Saxena immediately sanctioned setting up of training cum production center for the Eri Silk, which is traditionally worn by local tribals. The work, however, progressed at a slow pace due to COVID-19 lockdown.

Recently KVIC also distributed 250 honeybee boxes in Chullyu village which has rich flora for production of high-altitude honey. Located on the main highway just 30 km before the most popular tourist spot Ziro, Chullyu is a scenic village known for its eco-friendly ways of living. It is easily approachable by tourists which is an advantage for the local artisans.

“The training cum production center is the first of its kind facility in Arunachal Pradesh and a big boost to weaving activities in the entire region. Training of artisans and supporting the production of Eri Silk, which is indigenous to the North Eastern states, will create local employment and sustainable development in the region which is aligned with the Prime Minister’s vision of Aatmanirbhar Bharat,” Saxena said. “KVIC will also create an exclusive page on its online portal to market their products,” he added.

The development assumes significance as the tribal population in Arunachal Pradesh, men and women alike, traditionally wear Eri Silk and Khadi Cotton clothes which carries a deep significance to their egalitarian tribal society. However, the people of the state must buy Silk from outside markets including those in Assam.

KVIC has also planned design intervention by engaging professional design institutes like NIFT Shillong, NID Jorhat and even local designers in Arunachal to develop new designs to suit the modern taste of tribal youths.

KVIC also aims to connect the center with the tourists visiting Ziro tourist spot and thus providing an assured market to the local artisans for their products. The production center will be equipped to cater to the market demand. For the initial period, KVIC will also provide raw material and expenditure on training and wages and the cost of developing the prototypes of new designs.

MoD's big push to Atmanirbhar Bharat initiative; Import embargo on 101 items beyond given timelines to boost indigenisation of defence production

 

Prime Minister Mr Narendra Modi in his address to the Nation on May 12, 2020 had given a clarion call for a self-reliant India based on the five pillars, i.e., Economy, Infrastructure, System, Demography and Demand and announced a special economic package for Self-Reliant India named ‘Atmanirbhar Bharat’. Taking cue from that evocation, the Department of Military Affairs (DMA), Ministry of Defence (MoD) has prepared a list of 101 items for which there would be an embargo on the import beyond the timeline indicated against them, as indicated in the attached Annexure.

This is a big step towards self-reliance in defence. It also offers a great opportunity to the Indian defence industry to rise to the occasion to manufacture the items in the negative list by using their own design and development capabilities or adopting the technologies designed and developed by Defence Research and Development Organisation (DRDO) to meet the requirements of the Armed Forces in the coming years.

The list is prepared by MoD after several rounds of consultations with all stakeholders, including Army, Air Force, Navy, DRDO, Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and private industry to assess current and future capabilities of the Indian industry for manufacturing various ammunition/weapons/platforms/equipment within India.

Almost 260 schemes of such items were contracted by the Tri-Services at an approximate cost of Rs 3.5 lakh crore (US$ 49.65 billion) between April 2015 and August 2020. With latest embargo on import of 101 items, it is estimated that contracts worth almost Rs 4 lakh crore (US$ 56.75 billion) will be placed upon the domestic industry within the next five to seven years. Of these, items worth almost Rs 1,30,000 crore (US$ 18.44 billion) each are anticipated for the Army and the Air Force while items worth almost Rs 1,40,000 crore (US$ 19.86 billion) are anticipated by the Navy over the same period.

The list of 101 embargoed items comprises of not just simple parts but also some high technology weapon systems like artillery guns, assault rifles, corvettes, sonar systems, transport aircrafts, light combat helicopters (LCHs), radars and many other items to fulfil the needs of our Defence Services. The list also includes, wheeled armoured fighting vehicles (AFVs) with indicative import embargo date of December 2021, of which the Army is expected to contract almost 200 at an approximate cost of over Rs 5,000 crore (US$ 709.32 million). Similarly, the Navy is likely to place demands for submarines with indicative import embargo date of December 2021, of which it expects to contract about six at an approximate cost of almost Rs 42,000 crore (US$ 5.96 billion). For the Air Force, it is decided to enlist the light combat aircraft LCA MK 1A with an indicative embargo date of December 2020. Of these, 123 are anticipated at an approximate cost of over Rs 85,000 crore (US$ 12.06 billion). Hence, there are highly complex platforms that are included in the list of 101 items, of which details of three examples are given above.

The embargo on imports is planned to be progressively implemented between 2020 to 2024. The aim behind promulgation of the list is to apprise the Indian defence industry about the anticipated requirements of the Armed Forces so that they are better prepared to realise the goal of indigenisation. The MoD has adopted many progressive measures to encourage and facilitate ‘Ease of Doing Business’ by the defence Production entities. All necessary steps would be taken to ensure that timelines for production of equipment as per the Negative Import List are met, which will include a co-ordinated mechanism for hand holding of the industry by the Defence Services.

More such equipment for import embargo would be identified progressively by the DMA in consultation with all stakeholders.

A due note of this will also be made in the Defence Acquisition Procedure (DAP) to ensure that no item in the negative list is processed for import in the future.

In another relevant step, the MoD has bifurcated the capital procurement budget for 2020-21 between domestic and foreign capital procurement routes. A separate budget head has been created with an outlay of nearly Rs 52,000 crore (US$ 7.38 billion) for domestic capital procurement in the current financial year.

IMPORT EMBARGO LIST OF DEFENCE WEAPONS/PLATFORMS