The shares of defence equipment manufacturers, service providers and ship-builders gained even though benchmark indices were deep in the red. This happened after India barred certain imports to boost domestic manufacturing.
According to a PIB statement dated August 28, 2022, the Defence Ministry has approved a “third positive indigenisation list” of 780 strategically important line replacement units, sub-systems, and components with a timeline beyond which they will only be procured from the domestic industry.
This move was made in pursuit of self-reliance in defence manufacturing and to minimize imports by defence public sector undertakings under the government’s Atmanirbhar initiative.
This list is in continuation of two such lists approved in December 2021 and March 2022. These three lists collectively contain 2,500 items that are already indigenised and 458 items which will be indigenised within the threshold timelines. Further, it has set timelines for a staggered import ban from December 2023 to December 2028.
The indigenisation of the items will be done through different routes under the ‘make’ category, as per the statement. This category aims to achieve self-reliance by involving greater participation of the Indian industry in defence manufacturing.
India is one of the largest importers of arms globally. It is facing tough challenges on its northern and western frontiers. The Indian armed forces are projected to spend around $130 billion (one billion is equal to ₹ 100 crores) in capital procurement over the next five years, according to estimates. Moreover, the Defence Ministry has set a goal of a turnover of $25 billion (₹ 1.75 lakh crore) in defence manufacturing in the next five years, including an export target of $5 billion worth of military hardware.
“Projects involving design and development of equipment, systems, major platforms or upgrades thereof by the industry can be taken up under this category,” the ministry said.
Mazagon Dock Shipbuilders Ltd gained the most among its peers. It gained 12.66% today and settled at 399.00 at the closing bell. It was followed by Paras Defence and Space Technologies Limited (up 5.20%), Cochin Shipyard Ltd (up 3.72%), Astra Microwave Products Limited (up 3.06%), Avantel Ltd (up 1.66%), Bharat Electronics Ltd (up 1.15%), MTAR Technologies Ltd (up 0.93%).
Written by Simran Bafna
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