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Domestic Entities to get Preference in Defence Procurement : DPP 2011 Print E-mail
Written by Anand   
Thursday, 20 January 2011
New Delhi: The newly unveiled Defence Production Policy (DPrP) aims at creating conditions conducive for the private industries to play an active role to achieve the objective.

The government will endeavour to build a robust indigenous defence industrial base by proactively encouraging larger involvement of the Indian private sector in design, development and manufacture of defence equipment. Towards this end, efforts would be made to progressively identifying and address any issue which impacts or which has potential of impacting the competitiveness of the Indian Defence Industry in comparison to foreign companies.

DPrP will act as a catalyst to enhance potential of Small and Medium Enterprises (SMEs) for indigenisation as also for broadening the defence research and development base of the country.

Releasing the document, Shri Antony said the Policy aims to achieve maximum synergy among the Armed Forces, DPSUs, OFBs, Indian Industry and Research and Development institutions. The function was attended among others by the Minister of State for Defence Shri MM Pallam Raju, Defence Secretary, Shri Pradeep Kumar, Secretary Defence Production, Shri Raj Kumar Singh and the DG Acquisition Shri Vivek Rae. The Defence Production Policy has been prepared after extensive consultations with various stakeholders such as the three Services, Coast Guard, Integrated Defence Staff, DRDO and Indian Industry Associations – CII, FICCI, ASSOCHAM etc.

Under the new Defence Production Policy, coming into force with immediate effect, preference will be given to indigenous design, development and manufacture of defence equipment. Therefore, wherever the required arms, ammunition and equipment are possible to be made by the Indian industry within the time lines required by the Services, the procurement will be made from the indigenous sources. Whenever the Indian industry is not in a position to make and deliver the equipments as per the SQRs in the requisite time frame, procurement from foreign sources would be resorted to, as per Defence Procurement Procedure. While examining procurement cases, the time taken in the procurement and delivery from foreign sources vis-a-vis the time required for making it in the country, along with the urgency and criticality of the requirement, will be examined as per the Defence Procurement Procedure before deciding to proceed with procurement from foreign sources.

Based on the approved Long Term Integrated Perspective Plan (LTIPP), equipment, weapon system and platforms required ten years and further down the line will by and large be developed within the country. Sub-systems that are not economically viable or practical to be made within the country may be imported, ensuring their availability at all times. However, as far as possible, the design and integration of the platforms and systems will be undertaken within the country.

Gurpal Singh, DDG, CII while commenting on the newly released Defence Production Policy stated ‘We appreciate MOD’s initiative to formulate the first ever Defence Production Policy which acknowledges that private sector would have to play a larger role in Defence Production. We anticipate that an implementation road map with benchmarks would be announced sooner.’

To synergise and enhance the national competence in producing state of the art defence product within the price lines and time lines that are globally competitive, all viable approaches such as formation of consortia, joint venture and public private partnerships etc. within the government approved framework will be undertaken. The academia, research and development institutions as well as technical and scientific organisations of repute will be involved for achieving this objective.

The government will further simplify the procedure under the “MAKE” category of DPP in such a manner that it enables indigenous design and development of the required defence products by both public and private industries in a faster time frame.

Service Headquarters while laying down the qualitative requirements for defence products will exercise due diligence at all times to keep in view feasibility and practicability of the QRs. However, it will be ensured that the defence products developed in the country provide a competitive edge to our services vis-a-vis potential adversaries.

The Defence Production Policy recognises that development of complex systems is a stage process with incremental changes progressing from Mk-1 and Mk-2 and so on. The stage process will be followed. However, at every review of such developmental projects by the Defence Production Board or Defence R&D Board, as the case may be, it will be ensured that our equipment, weapons systems and platforms are such that they provide an edge to our forces over our potential adversaries. In case of delays in the realization of the projects, the corresponding proposal will be processed as per the Defence Procurement Procedure and the option of “BUY” shall be followed for the necessary numbers till indigenous production capability is established where after indigenous systems shall be procured.

Policies will also be put in place to encourage the DPSUs, OFB and the private sector to strengthen their research and development wings so that constant upgradation and improvement in systems under manufacture is possible. The government will set up a separate fund to provide necessary resources to public and private sector including SMEs as well as academic and scientific institutions to support research and development of defence products.

The Defence Minister will hold an annual review of the progress in self reliance that has been achieved during the year.

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