Government of India

Ministry of Defence

WEBINAR ON BUDGET ANNOUNCEMENTS: 2022 - 23

“AATMANIRBHARTA IN DEFENCE - CALL TO ACTION”

10:30 Hrs – 14:15 Hrs I 25 February 2022

Participants to login at 10:00 Hrs

Inaugural Session (30 Minutes)

10:30 Hrs Hon’ble PM comes online

10:30 - 10:32 Hrs Welcome by Defence Secretary Dr Ajay Kumar

Defence Secretary

10:32 Hrs Hon’ble Prime Minister’s

Address

Hon’ble PM goes offline

Presentation

About 10 minutes Presentation on the overall vision

& initiatives of MoD & Webinar

themes

Shri Sanjay Jaju

Additional Secretary, DDP

Breakout Session 1A (65 minutes)

Theme- Progressive increase in the capital procurement budget for domestic

industry – (Opportunities & Challenges)

(Co-Chaired by Defence Secretary & Shri S P Shukla, President, SIDM)

Moderator cum Repertoire: Rear Adm Pritam Lal (Retd), Principal Advisor SIDM

1-2 Min. Theme video

11:10 – 11:15 Hrs Address by the Co-Chair Dr Ajay Kumar

Defence Secretary

11:15 - 11:20 Hrs Presentation by SIDM & address

by the Co-chair

Shri S P Shukla

President, SIDM

11:20-11:25 Hrs Presentation on UP Defence

Corridor

Shri Awanish Kumar Awasthi

CEO, UPEIDA

11:25-11:55 Hrs Interventions by Lt Gen Shantanu Dayal

DCOAS (CD&S)

Prof. Abhay Karandikar

Director, IIT Kanpur

Shri Sukaran Singh

CEO & MD, TATA Advanced

Systems

Shri N Raveeswaran

Co Chair FICCI Defence

Shri Ravi Kant

CMD, Munitions India Ltd

Shri Mudit Narayan

Chief Technology Officer, O/o PSA

Shri Ashish Kansal

ED, SMPP

11:55-12:15 Hrs Interactive Session

Breakout Session 1B (65 minutes)

Theme- Developing All round Defence R&D ecosystem in the country

(Co-Chaired by Principal Scientific Advisor to Govt. of India & Sh S M Vaidya,

Executive Vice President and Business Head Godrej and Boyce)

Moderator cum Repertoire: Shri Abhishek Jain, Zeus Numerix Ltd.

1-2 Min. Theme Video

11:10- 11:20 Hrs Address by the Co-Chairs

11:20-11:55 Hrs Interventions by Shri Rakesh Ranjan

Additional Secretary, Dept. of

Higher Education

Prof. V Ramgopal Rao

IIT Delhi

Shri Vikas Mishra

Myelin Innovation

Shri Ashley Resquinha

Electropneumatics & Hydraulics

Ltd., Pune

Shri M K Gupta

Chairman of Defence Committee of

PHDCCI

Shri Vish Sahasranamam

CEO, Forge

11:55- 12:15 Hrs Interactive Session

Breakout Session 2A (65 minutes)

Theme - To meet wide ranging testing and certification requirements - Setting up

an independent nodal umbrella body

(Co-Chaired by Additional Secretary DDP & Shri Jayant Patil, Director, L&T

Defence)

Moderator cum Repertoire: Shri Anurag Bajpai, Joint Secretary, DDP

1-2 Min. Theme Video

12:25 - 12:30 Hrs Address by the Co-Chair

Shri Sanjay Jaju

Additional Secretary, DDP

12:30 -12:35 Hrs Presentation by L&T Defence &

address by the Co-chair

Shri Jayant Patil

Director, L&T Defence

12:35 – 12:40 hrs Presentation on Tamil Nadu

Defence Corridor

Shri Pankaj Kumar Bansal

Principal Secretary & CMD TIDCO

12:40 - 12:45 Hrs Presentation By IIT Madras Lt Gen P R Shankar (Retd.)

Professor of Practice, IIT Madras

12:45 - 13:10 Hrs

Interventions by Dr AVPS Prasad

CE CEMILAC

Prof. Manindra Agrawal

IIT Kanpur

Shri Arun T Ramchandani

Chairman, FICCI Defence

Shri Satyanarayan Nuwal

Co-Chair, PHDCCI Defence

Air Marshal (Retd.) Shirish B. Deo

JSR Dynamics

Shri Sameer Joshi

CEO, NewSpace

13:10 - 13:30 Hrs Interactive Session

Breakout Session 2B (65 minutes)

Theme- SPVs by Industries with DRDO and other Organisations

(Co-Chaired by Secretary DRDO & Shri Baba Kalyani, MD Bharat Forge Ltd.)

Moderator cum Repertoire: Mr PR Aggarwal, PTC Industries

1-2 Min. Theme Video

12:25 - 12:35 Hrs Address by the Co-Chairs

12:35 - 13:10 Hrs Interventions Prof. Ishan Sharma

IIT Kanpur

Shri Munjal Shah

Paras Defence & Aerospace

Shri Ashish Rajvanshi

CEO and President Adani Defence

Shri R Madhavan

CMD HAL

Shri Gautam Mehra / Shri

Shashank Tripathi

Partner PwC

13:10 - 13:30 Hrs Interactive Session

Valedictory Session (35 minutes)

13:40 - 14:00 Hrs Summing up Respective Repertoire

14:00 - 14:10 Hrs Valedictory Address

Shri Rajnath Singh

Hon’ble Raksha Mantri

14:10 - 14:15 Hrs Vote of Thanks

Shri Anurag Bajpai

Joint Secretary (P&C), DDP

End of Webinar

* * * * * *

Concept Note on Theme – 1A

Progressive increase in the capital procurement budget for domestic

industry – (Opportunities & Challenges)

Self-reliance in defence has been the cornerstone of India’s defence production

policy. The recent call for “Aatmanirbhar Bharat” has provided further impetus to realise

the goal of self-reliance. Over the years, transparent and streamlined Procurement

Procedures, Production Policies and ‘Make in India’ initiatives have provided significant

stimulus to demand for indigenous products.

2. The size of the Defence Industry, including Aerospace and Naval Shipbuilding

Industry, is currently estimated to be about ₹ 85,000 Cr (2020-21). While the contribu-

tion of Public Sector is estimated to be ₹ 68,000 crore, the share of Private Sector has

steadily grown to more than ₹ 17,000 crore over the years.

3. The Government has taken a number of policy initiatives to encourage

indigenous design, development and manufacture of defence equipment in the country

and create a robust defence industrial ecosystem. These initiatives, inter-alia, include

according priority to procurement of capital items from domestic sources under Defence

Acquisition Procedure (DAP)-2020; Notification of two ‘Positive Indigenisation Lists’ of

total 209 items of Services and one ‘Positive Indigenisation List’ of total 2851 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 Innovations for Defence Excellence (iDEX) scheme involving

startups & Micro, Small and Medium Enterprises (MSMEs); Implementation of Public

Procurement (Preference to Make in India) Order 2017; Launch of an indigenization

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; Establishment of two

Defence Industrial Corridors one each in Uttar Pradesh and Tamil Nadu; conversion of

Ordnance Factory Board into 7 new Defence Companies and issuing of action plan by

the MoD aiming to ensure that contracts for all Capital Acquisition cases are finalized

within two years of AoN.

4. To further develop and augment the capabilities of our Armed Forces, the

defence capital outlay in the annual budget of 2022-23 has been increased by 12.82%

from the preceding year.

5. In furtherance to its commitment to reduce import dependence and modernise

our armed forces with our indigenous technology, the Government has been

progressively increasing the Capital procurement budget for the domestic industry. In

the annual budget of 2022-23, 68 per cent of the capital procurement budget has been

earmarked for domestic industry, which is an increase of 4 percentage points over the

previous year. This would open a plethora of opportunities for the domestic industry.

6. At the same time, it is prudent and challenging that the modernization

requirements of the Armed forces and the Design and production ecosystem of the

country are closely interlinked.

Deliberations expected during the webinar

Is the industry ready to absorb the increased outlay?

Practical difficulties & challenges being faced by the industry in absorbing this in-

crease?

What could be the key measures and changes required in the existing policies or

procedures to remove these difficulties and?

How to reduce the time lag in placement of orders?

Concept Note on Theme – 1B

Developing All round Defence R&D ecosystem in the country

R&D and development of technologies are integral to Aatmanirbharta in Defence.

Achieving the target of turnover of Rs. 1,75,000 Crore including export of Rs. 35,000

Crore (US$ 5 Bn) in Defence goods and services by 2025 would not be possible without

thrust on Innovation and R&D.

2. The principle of Aatmanirbharta in Defence should not be restricted only to

Manufacturing but should also extend into the realm of developing indigenous

capabilities in existing and new technologies and creating design leadership among

industry, start-up and academia.

3. Many significant products including 155mm Artillery Gun system ‘Dhanush’, Light

Combat Aircraft ‘Tejas’, Surface to Air Missile system ‘Akash’, Main Battle Tank ‘Arjun’,

T-90 Tank, T-72 tank, BMP-II/IIK, Su-30 MK1, Cheetah helicopter, Advanced Light

Helicopter, Dornier Do-228, High mobility Trucks, INS Kalvari, INS Khanderi, INS

Chennai, Anti-Submarine Warfare Corvette (ASWC), Arjun Armoured Repair and

Recovery Vehicle, Bridge Laying Tank, Bi-Modular Charge System (BMCS) for 155mm

Ammunition, Medium Bullet Proof Vehicle (MBPV), Weapon Locating Radar (WLR),

Integrated Air Command and Control System (IACCS), Software Defined Radios(SDR),

Lakshya Parachute for Pilotless Target Aircraft, Opto Electronic Sights for battle tanks,

Water Jet Fast Attack Craft, Inshore Patrol Vessel, Offshore Patrol Vessel, Fast

Interceptor Boat, Landing Craft Utility, 25 T Tugs, etc. have been produced in the

country during the last few years which are being used by the Indian Armed Forces. The

current value of defence production based on DRDO designs exceeds Rs 3 Lakh crore.

4. DRDO, being the R&D wing of MoD, is mainly mandated with empowering India

with cutting edge defence technologies. The DPSUs have also come a long way in

terms of development and engineering of products and technologies through their own

R&D as well as in collaboration with DRDO labs and services.

5. A number of initiatives have been taken in the recent past to promote R&D in

Defence, as summarized below:

5.1 There has been continuous interaction with academia and industries and both

are facilitated in every aspect of scientific and technological requirements. Today, there

are approximately 14000 industries in DRDO’s ecosystem with more than 2500

industries as Tier 1, Tier 2, Tier 3 industries. 1410 licencing agreements for ToT have

been signed with industries.

5.2 DRDO is working with approximately 280 academic institutes engaging more

than thousand researchers with budget commitment of about Rs. 1100 Cr on Defence

R&D problems for basic, applied, and targeted research. DRDO has established 10

DRDO-Industry-Academia Centres of Excellence in various academic institutions across

the country. DRDO is also proposing to set up chairs for specific areas in various

universities for long term engagement with academic institutions.

5.3 In order to promote indigenous design and development of defence equipment

‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ category

has been accorded top most priority for procurement of capital equipment.

5.4 The ‘Make’ Procedures of capital procurement has been simplified. There is a

provision for funding up to 70% of development cost by the Government to Indian

industry under Make-I category. Procedure for ‘Make-II’ category (Industry funded), has

number of industry friendly provisions such as relaxation of eligibility criterion, minimal

documentation, provision for considering proposals suggested by industry/individual etc.

5.5 The Government has set up the Technology Development Fund (TDF) to

encourage participation of public/ private industries especially MSMEs and Startups in

defence R&D, through provision of grants, so as to create an eco-system for enhancing

cutting-edge technology capability for defence applications. TDF scheme of DRDO

provides financial support to the Indian industries of up to Rs.10 Cr for the design and

development of innovative defence products not currently available for our armed

forces. The scheme is especially focussed on development of futuristic technologies

and import substitution of products/technologies required for or imported by the armed

forces. So far, 41 projects have been awarded and more than Rs. 200 Cr have been

committed as grants to Indian industries for defence R&D. At present, 2 projects and 4

technologies have been successfully completed and many more are close to

completion. DRDO also conducts innovation contests by the name Dare to Dream to

encourage participation of Startups and Individual Innovators in defence R&D though

solicitation of suo moto proposals. Under Dare to Dream, more than 60 innovators have

been provided the opportunity to realise their proposed innovations through grant-in-aid

funding under the TDF Scheme.

5.6 An innovation ecosystem for Defence titled Innovations for Defence Excellence

(iDEX) has been launched in April 2018. iDEX is aimed at creation of an ecosystem to

foster innovation and technology development in Defence and Aerospace by engaging

Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and

Academia and provide them grants/funding and other support to carry out R&D which

has potential for future adoption for Indian defence and aerospace needs. Under the

iDEX framework, DDP conducts innovation contest, namely Defence India Startup

Challenge (DISC) to encourage startups and individual innovators across the country.

An initiative called “iDEX4Fauji” has been launched to source ideas from the frontline

soldiers. So far, 114 Start-ups have been engaged and 63 contracts have been signed.

One procurement order has been placed by Navy. To give a major boost to

development of innovative defence technologies and support the growing Start-up base

in the country, Ministry of Defence has also approved a new scheme worth Rs 498.80

Crores during current year, which would support about 300 new Start-ups and 20

incubators. Further, it has also been decided to channelize Rs 1000 Crore during 2021-

22 for procurement from the iDEX Start-ups. DRDO is also helping all iDEX partner

industries with certification and testing of prototypes used in technology development.

5.7 DRDO’s patents can be freely used by Indian industry. This provides an

opportunity to Indian industries to use DRDO Intellectual property to further boost up

their R&D and develop new technologies.

5.8 DRDO has identified a list of 108 systems and subsystems which will be

designed, developed and manufactured by industry only and will not be taken up by

DRDO itself for development.

5.9 DRDO is engaging industry right from the development stage of the projects.

Such industries are given the status of Development cum Production Partners (DcPPs).

Industries associated with DRDO further get nominated as Development Agencies

(DAs) and Production Agencies (PAs) to ensure smooth transition to production and

Product Life Cycle Management. The DcPP policy for DRDO developed systems,

incorporated in the Defence Acquisition Procedure (DAP) 2020, ensure involvement of

industries from the beginning of the development cycle. With the introduction of DcPP

scheme, now the industries are involved not only in the manufacturing but also in the

design and development of systems. Implementation of this policy has not only enabled

the industries, but also facilitated hand-holding throughout the development phase.

DcPP is able to absorb the technology during the development phase itself resulting in

concurrent engineering which, in turn, leads to reduction in the time frame of the

productionisation. This policy also brings in a level playing field between the private and

public sector industries.

5.10 DRDO also transfers technologies to industry at nil or minimum cost and no

royalty is charged for sales to Indian Armed Forces.

6. In the annual budget of 2022-23, it has been announced that Defence R&D will

be opened up for industry, startups and academia with 25 per cent of Defence R&D

budget earmarked.

7. Earmarking 25% of Defence R&D budget for Defence R&D by industry, startups

and academia is a major policy initiative to bring Industry in a bigger way into Design &

Development effort in Defence which has traditionally been undertaken by DRDO.

Assured funding for defence R&D for industry /startups /academia will give a much-

needed boost to defence R&D eco-system.

8. It is though important to ensure that the development of such technologies must

be within reasonable timeframe, as required by the Services.

9. The Government envisions to create an environment that encourages R&D,

rewards innovation, creates Indian IP ownership and promotes a robust and self-reliant

defence industry. To reduce imports and in line with modernization needs of our Armed

forces, indigenous Research & Development (R&D)/ Design & Development (D&D)

based production should be encouraged.

Deliberations expected during the webinar

Details of quantum of the 25% of defence R&D budget earmarked for industry,

start-ups and academia.

Structures and mechanism for disbursal of the same to the above categories as

well as for specific projects.

What could be the technologies amenable for Industry led R&D effort?

Specific areas which will be reserved for R&D by industry, starts-ups and

academia. i.e. DRDO will not devote resources for R&D in these areas.

What should be the interface and framework whereby Defence R&D undertaken

in academic institutions is translated into production and orders by the Forces?

What could be the candidate list of the projects/platforms/systems for Defence

research and D&D by industry, start-ups and academia?

IPR issues

How to ensure time bound development of such projects?

Linkages with order by Services. How to ensure the induction of the successfully

developed systems/technologies by the services?

What are the likely issues/constraints which industry, start-ups and academia

might face in building their defence R&D capabilities and how can these be

addressed?

Concept Note on Theme – 2A

To meet wide ranging testing and certification requirements - Setting up of an

independent nodal umbrella body

Trial and testing of the products lie at the heart of any R&D effort. Indian Defence

sector is in its evolutionary phase during which it would require significant hand-holding

to make it globally competitive on price and quality.

2. The key factors that impact the budding defence industry are the delays in

processes of trials and testing, non-availability of proof stock components, non-

accessibility to the test facilities at one place, leading to increased transportation cost

because of limited number of ranges and long waiting times.

3. Easy access to the state-of-the-art Testing infrastructure is an imperative for the

organic growth of Design and Development ecosystem and ensuring their safety,

reliability and intended use. MoD have opened up 134 Test Labs and 25 Proof

Ranges/Field Firing Ranges spread all across the country for industry use under the

administrative control of various Government Organizations.

4. With the growth of Indian Defence Industry and its footprints spreading across

the world and with the opening up of Defence R&D for the private industry, startups and

academia, the requirement of testing, trial and certification of indigenous products is

expected to increase exponentially. At the same time, trial, testing and certification

processes are also required to be performed efficiently for meeting the ever-growing

demands of the Indian Defence Industry in a time bound manner. The infrastructure

required for trial and testing is capital intensive and also essential for successful

development of niche defence technologies.

5. In order to achieve the exports target of Rs 35,000 Crore (US$ 5 Bn) in

Aerospace and Defence goods and services by 2025, Indian Industry has to not only

face tough competition from well-established International players in the world-market

but also the Indian Defence Industry has to create a market for their own products with

cutting-edge technologies and customers’ confidence at par with international products

by creating a ‘Made in India’ brand. To compete at such a level, products need to

undergo rigorous testing/trials as per international standards so that they can be

certified at par with international products.

6. At present, there is no entity in the country which caters to these wide ranging

trial, testing and certification requirements. The time is therefore most opportune to

further facilitate the Defence Industry by providing all the support required for Trial,

testing and certification of the products being developed by them.

7. In the annual budget of 2022-23, it has been announced that an independent

nodal umbrella body will be set up for meeting wide ranging testing and certification

requirements.

8. It is envisaged to set up an autonomous Governing body to permit, regulate,

promote, hand-hold, monitor and supervise Trial, Testing and Certification facilities and

services offered by Ministry of Defence and its various organizations. This body may act

as a Single-Window Nodal agency to enable and regulate the existing facilities of Trial,

Testing and Certification of Defence Products for their optimal use by the industry,

startups and academia, besides creating new facilities, as per requirement.

9. Bringing all the Trial, Testing and Certification facilities under one umbrella

agency would lead to their efficient and optimum utilization, avoid duplicity of

infrastructure and also expand the same to meet the requirements of future technology

related areas. This would in turn further enhance the growth of Indian Defence Industry

in line with Aatmanirbhar Bharat Abhiyan.

Deliberations expected during the webinar

Expectations of the industry from that body

Deliberations to make such body effective for meeting testing and certification

requirements, including

i. Scope

ii. Funding mechanism

iii. Manpower

iv. Implementation mechanism

v. Governance structure

vi. Regulatory frame work

vii. Role of the industry

Concept Note on Theme – 2B

SPVs by industries with DRDO and other Orgnisations

All the systems being designed by DRDO are produced by Indian industries.

DRDO is developing even bombs and missiles through private industries in

Development cum Production Partner (DcPP) mode. Some of the successful products

already developed through industries in the DcPP mode include Advanced Towed

Artillery Gun, Long Range Glide Bomb, Pinaka Rocket system and Short Span Bridging

system.

2. SPVs for major systems will further institutionalise the process and involve

industry right since the inception of the Defence D&D project, making them an important

stakeholder in the entire design & development project and further into production. The

SPV will be the agency responsible for series production of the platform/equipment and

will also handle exports, as the case may be.

3. Further, the Private industry will be encouraged to take up D&D of military

platforms and equipment in collaboration with DRDO and other organizations through

SPV model.

4. SPVs are formed between Industries and DRDO other organisations. Some of

the systems which can follow SPV route are Fighter Aircraft, Missiles, Guns, Tanks,

Torpedoes, UAVs, etc. This will lead to concurrent design and engineering, compressed

development timeline and reduced number of trials.

5. The system will also provide a Single Point of Contact for life cycle support,

maintenance and exports.

Deliberations expected during the webinar

The following is expected to be discussed w.r.t. SPV during the webinar

Process for creation of SPV

Share Capital, Shareholding, Equity

Financing mechanisms

Activities to be carried by SPV

What can be the candidate list of projects/systems that can be designed and

developed by the industry in collaboration with DRDO and other Organisations

Feasibility and constraints of SPV model for such identified projects/systems.

Mechanism to choose SPV partner

Manpower in SPV, salary, deputation

Sharing of existing infrastructure by SPV

Mechanism to ensure time bound development of such projects/systems?

What other models can be considered?