India’s New Armament Production Units fully functional after Corporatization of OFB and other policy initiatives

In the last five years, a total of 194 Industrial Licenses have been issued to private companies in Defence sector for manufacturing of items like ammunitions, artillery guns, howitzers, air defence guns, UAVs, destroyers, frigates, night vision devices, ballistic protection items, radars, opto-electronic devices etc. License to manufacture defence equipment is granted by the licensing authorities namely, Department for Promotion of Industry and Internal Trade (DPIIT) and Ministry of Home Affairs under Industries (Development & Regulation) Act and Arms Act respectively, in consultation with Ministry of Defence. Further, to provide autonomy and enhance efficiency and unleash new growth potential in the Ordnance Factories, the Government has corporatized OFB and converted it into seven (07) new Defence Public Sector Undertakings (DPSUs). All new Defence PSUs have become operational from 1^stOctober 2021. The Government has decided to grandfather the indents/orders, worth more than Rs62,000 crore, pending with the OFB post corporatisation, to ensure continuity in supply of strategic arms and ammunitions to the services.

Moreover, two positive indigenization lists for total 209 items have also been notified by the Government with an embargo on the import beyond the timeline indicated against each of them. There has been a decline in percentage of capital expenditure on procurement of defence equipment from foreign vendors from 48% in 2018-19 to 36% in 2020-21.

This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Ms Saroj Pandey in Rajya Sabha today.

PIB Release ID: 1783414