In what could be termed as a path-breaking move, the Ministry of Defence has finalised a new policy that will allow the government to select an Indian private company to collaborate with a foreign partner and produce military equipment in India.Termed as “strategic partnership”, the policy would appear as a chapter in the existing defence procurement procedure (DPP), top sources told The Tribune.
The DPP is the guiding framework on procedures of military equipment makers on investing in the country.The move is expected to boost the ‘make in India’ initiative and build a military-industrial base in the country. At present, India is the world’s largest importer of weapons, equipment and platforms with 70 per cent of its inventory being imported.Till now, the MoD was bound to select a public sector undertaking to partner with a foreign company. Or in case the foreign company chose its Indian partner, the MoD had no say in it. “The strategic partnership does not mean that the public sector companies will not be nominated.
They will keep on getting work,” a senior functionary said.Under the new policy, the Indian private company will be selected on parameters that include cost of equipment, its indigenisation content, technology transfer being offered by the foreign partner, technology absorption capacity of the Indian partner, the financial status of the Indian company and its experience in military equipment making.
The MoD would select the Indian partner, said the source, adding that this was needed as the foreign companies—some of whom are in the fortune 500 list — did not know whom to partner with in India. The foreign companies will have firm policy to follow while the choice of Indian partner will be with the government. The move will remove the hurdles in making the next lot of submarines, copters and fighter jets. “It will create an ecosystem of hi-tech items to be made in India,” the functionary explained.