New Delhi, Oct. 27: The Centre is set to come out with a new military goods purchase policy that is designed to end the monopoly of the government-run Defence Research and Development Organisation (DRDO).
The DRDO alone develops, patents, formulates and devises products for the army, navy and the air force.
Defence minister A.K. Antony said here today the latest defence procurement policy (DPP) to be issued on November 1 would allow tenders to be issued to Indian companies. These firms may then scout the world markets for joint ventures with multinational defence companies for transfer of technology and production.
This new proviso — being allowed in the DPP for the first time — is under a new category through which the government will procure military hardware. The category is called “Buy and Make (Indian)”.
“The move is primarily aimed at encouraging pro-active participation by the Indian industry, which could establish joint venture production arrangements with any foreign manufacturer,” the minister said.
The practice so far has been to issue requests for proposals (RFPs) to known international arms majors who would then seek to tie up with Indian companies if their offers were accepted under the offsets policy.
The offsets policy mandates that at least 30 per cent of the value of an order — of Rs 300 crore and above — from the armed forces should be re-invested in defence production or procurement by the vendor in India.
Indian defence purchases vary from year to year. The capital expenditure earmarked for purchases in the current budget for the army, navy and the air force is nearly Rs 50,000 crore.
Antony announced the policy amendment at the Institute for Defence Studies and Analyses. “This would help Indian industry to work out the technological requirements and build in-house capabilities in order to meet the future defence requirements. I am sure that the industry will respond positively to this proposal.”
Antony said the policy was being made more transparent. All requests for information (RFI) to companies will be put up on the defence ministry’s website. The ministry will also invite industry representatives to participate in meetings for defence acquisition planning.
In a separate meeting at the Confederation of Indian Industry (CII), Air Chief Marshal P.V. Naik said the current defence procurement policy should be simplified.
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