02:07 GMT27 September 2020
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    New Delhi (Sputnik): In a major boost to domestic industry, the Indian defence ministry has created a budget of $7 billion for domestic capital procurement in the current financial year, under self-reliant India scheme announced by Prime Minister Narendra Modi. The move is likely to impact defence trade with other countries.

    Indian Defence Minister Rajnath Singh has announced an absolute ban on the import of 101 defence equipment including simple parts and high technology weapons systems like artillery guns, assault rifles, corvettes, sonar systems, transport aircraft, light combat helicopters, and radar arrays.

    ​With the latest embargo, contracts worth almost $53.354 billion (4 trillion INR) will be transitioned to domestic production within the next five to seven years, the ministry said in a statement. The army and air force are likely to procure items worth $17.340 billion (1.3 trillion INR) and navy for almost $18.674 billion (1.4 trillion INR) in the next four years.

    ​The Ministry of Defence has also bifurcated the capital procurement budget for 2020-21 between domestic and foreign capital procurement. A separate budget head has been created with an outlay of nearly $6.937 billion (520 bln INR) for domestic capital procurement in the current financial year.

    Amid the “big” announcement, opposition leader P. Chidambaram, taking a jibe at the government has said: “the only importer of defence equipment is the Defence Ministry. Any import embargo is really an embargo on oneself. What the Defence Minister said in his historic Sunday announcement deserved only an Office Order from the Minister to his Secretaries!”

    ​The announcement might be a whimper to the former finance minister but the move is going to hit India’s defence trade with Russia and the US. India is the second largest importer of arms in the world, and its largest suppliers are Russia and the US.

    Data compiled by Stimson Centre finds that Russia is India’s top defence supplier, accounting for $9.3 billion worth of exports to India since 2014. The US ranks a distant second, having sold defence supplies worth $2.3 billion to India in the same period.

    In next few years, Russian equipment like the S-400 systems, fighter jets and a quick reaction defence system will be inducted into the Indian armed forces. 

    Sameer Lalwani, research fellow at Stimson Center, in his paper shows that 86% of the equipment, weapons and platforms currently in military service in India is of Russian origin; the figure is a whopping 90% if around 10,000 pieces of military hardware are also taken into consideration.  


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