India’s Import Embargo on Defence Equipment

In August 2020, the Department of Military Affairs in the Indian Ministry of Defence published a list of equipment which, in a phased manner, from 2020 onwards, cannot be imported into India.

Part of the Government of India’s Atmanirbhar Bharat, or ‘Self-Reliant India’ response to the Covid-19 Pandemic, the embargo’s purpose is to increase local manufacturing, enhance India’s design and development capabilities, create more jobs and reduce the country’s reliance on expensive imports. The list runs from rudimentary parts through to extremely complex future platforms: for example, the Light Combat Aircraft (LCA) Mark II (an order worth USD 11.5Bn) for the Indian Air Force and six submarines (worth USD 5.7Bn) for the Indian Navy. Cumulatively, the Indian MOD expects to place orders worth USD 54Bn with domestic providers over the next 7 years.

This list is called the Negative Import List, and at first glance, especially from the
perspective of a foreign manufacturer, it looks like a protectionist step. But we believe
that, rather than being ‘negative’, this reform will eventually present a significant
opportunity for the UK defence sector.