SOURCE: AFI
In a significant shift from five years ago, the Indian Army has made remarkable strides in enhancing self-reliance through indigenous procurement. The financial year 2019-20 marked a pivotal moment in this journey when 57 percent of Army contracts were awarded to Indian companies, while 43 percent went to foreign vendors. However, subsequent years have witnessed a dramatic increase in the share of contracts with domestic firms, reflecting the government’s robust push for ‘Atmanirbhar Bharat’ (self-reliant India).
The transformation began gaining momentum in the financial year 2020-21, when the share of contracts with Indian firms surged to 73 percent, reducing the foreign vendors’ share to 27 percent. This trend continued into the 2021-22 financial year, maintaining the same distribution, thereby showcasing a sustained commitment to prioritizing domestic defense manufacturing.
The past two years have solidified this shift, with the Army inking 100 contracts each year with indigenous firms under capital procurements. This consistent performance underscores a strategic move to bolster the domestic defense sector, aligning with the broader national objective of reducing dependency on foreign defense equipment.
This significant transformation can be attributed to several proactive policy initiatives by the Indian government. The introduction of the Defence Acquisition Procedure (DAP) 2020, which emphasizes the procurement of defense equipment from domestic industries, has played a crucial role. Additionally, the government’s decision to earmark a substantial portion of the defense budget for domestic capital procurement has provided a robust impetus to indigenous defense manufacturing.
The consistent awarding of contracts to indigenous firms over the past two years marks a significant milestone in India’s journey towards self-reliance in defense. As the Indian Army continues to prioritize domestic procurement, this trend is expected to further consolidate, reinforcing the country’s defense capabilities and reducing its dependence on foreign vendors.