- 17 May 2023
- ICICI Securities
SPARES, COMPONENTS WORTH - 2570 CRORE FOR DEFENCE PLATFORMS INDIGENISED SO FAR
News: In an update about indigenisation of Line Replacement Units (LRUs)/sub-systems/spares & components for DPSUs, Department of Defence Production (DDP) of Ministry of Defence (MoD) has notified that, a total of 2736 these items have been indigenised so far out of 2958 items notified through first two PILs (positive indigenisation lists) that were to be indigenised by December 2022. The total import substitution value of these 2736 items was at Rs 2570 crore. So far, 4666 items have been notified by MoD for indigenisation through four PILs (positive indigenisation lists) - first PIL - 2,851, second PIL – 107, third PIL – 780, fourth PIL - 928).
Views: Though these LRUs/spares/components (used in manufacturing of defence platforms like fighter jets, warships, submarines, missiles, combat vehicles etc.) are not high value items, we believe indigenisation of these items would help defence PSUs (like Hindustan Aeronautics, Bharat Electronics, Bharat Dynamics, Mazagon Dock, Cochin Shipyard, Garden Reach, Mishra Dhatu Nigam) in terms of faster execution of their contracts as the supply chain would improve significantly through local sourcing of these items.
Impact: Positive