×
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

MoD okays indigenous defence equipment

Pvt sector can collaborate with foreign manufacturers
Last Updated 20 May 2017, 19:37 IST

 Helicopters, single-engine fighter aircraft, submarines, main battle tank and other armoured fighting vehicles could soon be made in India by the private sector in collaboration with foreign manufacturers under a policy cleared by the Ministry of Defence (MoD) on Saturday.

Called the Strategic Partnership (SP) model, the policy was approved by the Defence Acquisition Council (DAC) chaired by Defence Minister Arun Jaitley.

Breaking new ground, the policy will enable participation of private Indian firms in the ‘Make in India in Defence’ programme in developing the defence industrial eco-system in the country.

The model was conceived during the tenure of Jaitley’s predecessor Manohar Parrikar after extensive consultations with all stakeholders, including the industry and the MoD, over two years.

Under the policy, which will now be taken to the Cabinet Committee on Security (CCS), the government will involve major Indian corporates as well as the MSME sector in manufacturing these items. Under the new model, the single-engine fighter aircraft and helicopters segment will be open only to the private sector at the moment.

For submarines, armoured fighting vehicles and the main battle tank, the defence public sector undertaking (DPSUs) and ordnance factories board (OFB) will also be eligible for competition in the selection process.

The MoD decided to include public sector organisations in SPs, reversing the earlier decision that DPSUs and OFB will be kept out of the competition.

However, the MoD has put stipulations that to manufacture major defence platforms, SPs will require tie-ups with foreign Original Equipment Manufacturers (OEM) to cover manufacturing, transfer of technology, assistance in training skilled human resources and other support.

These partnerships or tie-ups between SP and OEM may take the form of joint ventures, equity partnership, technology sharing, royalty or any other mutually acceptable arrangement between the companies concerned, subject to the ownership conditions laid down by the MoD.

The SP model is likely to infuse self-sufficiency in defence manufacturing and help reduce India’s dependence on the  importation of weapons.

The new policy envisages the establishment of long-term strategic partnerships with qualified Indian industry majors through a transparent and competitive process.

The SP model is supposed to play the role of a system integrator by building an extensive ecosystem comprising development partners, specialised vendors and suppliers, in particular those from the MSME sector.

The highlights of the model include a sharp focus on a core area of expertise by ensuring only one SP will be selected per segment. The addition of more segments or a further sub-division of the identified segments may be considered by the MoD in the future if necessary, officials said.

ADVERTISEMENT
(Published 20 May 2017, 19:37 IST)

Follow us on

ADVERTISEMENT
ADVERTISEMENT