MoD & OFB ensure a level playing field for Private Sector

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The Ordnance Factory Board (OFB) in association with Confederation of Indian Industry (CII), organised a Seminar & Exhibition on OFB-Industry Partnership for Vendor Development and Outsourcing by OFs on 24th & 25th of August 2016 at New Delhi. The Seminar was inaugurated by Shri Manohar Parrikar, Hon’ble Raksha Mantri while the exhibition was inaugurated by Shri V P Yajurvedi, Director General, Ordnance Factory and Chairman, Ordnance Factory Board.

In his inaugural address, Raksha Mantri Shri Manohar Parrikar congratulated OFB & CII for teaming up for such a seminar and exhibition. He said interactions like these indicates Government’s commitment to ease of doing business. He further added that Ministry of Defence will ensure a level playing field for the private sector and that several steps have been taken towards the same. He cited example of Exchange Rate Variation (ERV) that was a long pending issue that was addressed.

Raksha Mantri touched upon issues like Performance Bank Guarantee which end up hurting both, the Indian Industry and the procuring organisation as the cost gets built into the quote. He assured that a fresh procurement procedure will be released by September or October which will address most of the issues that industry faces while dealing with OFs and other DPSUs. Raksha Mantri suggested that a new & comprehensive topic on Import Substitution will be added which can also act as a guiding principle for Defence Procurement Manual (DPM).

Shri Parrikar went on to add that L1 system is right, however, the process to arrive at L1 will have to be changed to accommodate better quality and technology. He said that procedure to determine should all-encompassing to ensure that price doesn’t become a deterrent to products which will be cheaper in the long run.

Shri Parrikar Congratulated CII for it’s stellar role raising industry specific issues with him from time to time and asked CII to follow up regularly to ensure that the matters are addressed. On Make in India, Raksha Mantri said that Joint Ventures like that of TASL-Boeing is a testimony to the fact that it is working and such JVs will also ensure FDI. He added that Indian companies should increase it’s investments in defence sector.

In his Special Address, Shri V P Yajurvedi, DGOF & Chairman, OFB said that the seminar was a collaboration between OFB & CII was a tale of two glorious organisations, with history of more than 100 years, coming together to facilitate interaction which will benefit both, Industry as well as the OFs. He said that in the backdrop of Make In India, Public Private Partnership is the key focus and that OFs were eager to partner with the Indian Industry and academia to ensure defence preparedness of our armed forces and security agencies.

DGOF added that OFB is looking for import substitution and working on joint development of defence equipments. He also urged the Indian industry to help in promoting exports of OFB manufactured products. He added that OFB is in process of Design, Development and Manufacture of new weapon platforms pertaining to land systems for the Indian Armed Forces and said that this provided a huge scope for the Indian Industry.

DGOF shared that OFB has surpassed all previous records to register a growth of over 24 per cent in the FY 2015-16. He said that OFB was further moving towards a turnover of Rs. 15,700 crore in FY 2016-17 which would be another jump of 15%. He said the goal was achieve Rs. 22,000 crore by FY 2018-19.

In this introductory address, Mr Shreekant Somany, Chairman, CII National MSME Council thanked Hon. Raksha Mantri for promoting such industry interactions and complimented him for his leadership which has brought in a high degree of transparency in the system that has worked towards bringing the much needed mutual trust.

Mr Somany said that in last two years, MoD has introduced unprecedented reforms which were in sync with government’s vision of ease of doing business. He congratulated the Minister for the new a path breaking DPP 2016 which will give a huge impetus to defence items designed and Made in India, especially by MSMEs.

Mr Somany said that through projects like MAKE, there is a huge scope for import substitution which could substantially reduce the imports that are done by DPSUs and OFs. Mr Somany requested Hon. RM to consider the following requests of the industry:

  • OFs should consider long term partnerships with industry
  • Creation of a Technology Development Fund by OFB to support MSMEs
  • Creating a special ‘Made in India’ label/brand to facilitate exports of Made in India products

Mr Somany thanked and congratulated Chairman OFB for accepting CII proposal to partner for a seminar of this magnitude.

The Seminar was spread over two days with second day, 25th August 2016 being reserved for industry interactions with the officials of various OFs.

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