Relaxed defence norms for Indian industry

The defence ministry has further relaxed the norms for Indian industry to facilitate their entry into manufacturing some of the components needed by the armed forces.

The new rules - finalised at the Defence Acquisition Council meeting chaired by Defence Minister Nirmala Sitharaman on Tuesday - would open the doors of the defence industry to start-ups with innovative ideas and micro, small and medium enterprises.

Unlike the current system of purchase proposals coming from the Service Headquarters, the new rules permit the industry to suggest projects, especially among those items which are currently being imported. The proposals can also come from the three services.

The Navy and Army already have their own design bureaus where they consult Indian scientists, engineers and companies while designing and producing the components.

Created after amending the existing 'Make Procedure' in Defence Procurement Procedure (DPP)-2016, the new rules will further widen the scope of the industry.

The defence ministry modified the DPP after Sitharaman had a consultation with the industry including a session with the start-up companies.

Once a proposal comes, a defence ministry collegiate will vet the scheme before according an in-principle approval. Once the project is approved, the Service Headquarters will issue an Expression of Interest, asking the companies to make prototypes within 12-30 weeks. There is no limit to the number of industry players who may offer prototype.

Subsequently, a commercial Request for Proposal (tender) will be issued. Once the RFP is issued, it shall not be retracted. The industry who wins the bid is assured of an order between 69-103 weeks from the day of issuing the RFP.