Defence ministry notifies 5th positive indigenisation list of 346 items; DPSU stocks in focus

Moving ahead with its strategy to curtail imports in the crucial defence sector, the Centre on Tuesday, July 16, notified the "fifth positive indigenisation list" consisting of 346 items.

These items include strategically-important line replacement units, systems, sub-systems, assemblies, sub-assemblies, spares and components and raw materials, the Ministry of Defence said in an official release.

The items listed under the fifth positive indigenisation list have a cumulative "import substitution value worth ₹1,048 crore", the ministry noted.

DPSU stocks in focus

A total of nine defence public sector undertakings (DPSUs) are mentioned in the fifth positive indigenisation list issued by the government.

However, most of the leading DPSUs edged in the red after the list was notified by the Centre. HAL was trading 1.85% lower at ₹5,402.9 apiece on the NSE at 1:46 pm, Bharat Dynamics was down 1.73% at ₹1,600.5, BEL was down 1.1% at ₹327.75, and MDL was trading 0.2% lower at ₹5,382.

The DPSUs will undertake indigenisation of the items mentioned in the fifth PIL through various routes, including the ‘Make’ procedure or in-house development involving the industry, including MSMEs, the defence ministry said.

"This will provide impetus to the growth in economy, enhanced investment in defence and lead to reduced import dependence. In addition, this will augment the design capabilities of domestic defence Industry due to the involvement of academia and research institutions," it added.

'Aatmanirbharta' in defence

Over the past three years, the Centre has issued four positive indigenisation lists to boost 'aatmanirbharta' or self-reliance in the defence sector. The first list was notified in December 2021, the second in March 2022, the third in August 2022 and the fourth in August 2023.

The four lists comprised a total of 4,666 items, of which 2,972, having import substitution value worth ₹3,400 crore, have already been indigenised.

These lists issued so far for DPSUs are in addition to separate lists of 509 items notified by the Department of Military Affairs (DMA) for indigenisation. These lists include highly complex systems, sensors, weapons and ammunition.

Till June 2024, over 36,000 defence items were offered to the industry for indigenisation by the DPSUs and Service Headquarters (SHQs). "Of them, more than 12,300 items have been indigenised in the last three years. As a result, the DPSUs have placed orders on domestic vendors to the tune of ₹7,572 crore," the defence ministry noted.