Business IdeasNew defence policy to bring clarity
To allow pvt companies to compete with DRDO, PSUs to bid for equipment tenders.
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India’s new Defence Procurement Policy, or DPP, will allow domestic private companies to bid for armed forces’ equipment tenders and let them join hands with foreign manufacturers later for co-production through joint ventures.
The DPP-2009, to be rolled out on November 1, will replace the existing DPP-2008 that came into effect in September last year.
With change in the policy, the defence ministry is effectively allowing Indian private companies to compete with the Defence Research and Development Organisation (DRDO) and public sector defence firms, which were hitherto the only domestic agencies bidding for the tenders jointly with foreign firms, which provided technology and help in indigenous production to the government entities.
Defence Minister A K Antony told a seminar on defence acquisition here that the current review in DPP, which would be carried out annually instead of once in two years, aimed at “promoting and facilitating” Indian industry and “transparency and integrity” in defence acquisitions.
“We have reviewed the DPP and are ready to promulgate DPP-2009 with effect from November 1, 2009,” he said.
“The current review is primarily focused on two essential areas of promoting and facilitating wide participation of defence industry and enabling transparency and integrity in all acquisitions,” Antony added.
Under DPP-2008, the tender papers were issued only to foreign vendors, which were required to transfer technology to an Indian defence firm, called Production Agency, under a ‘Buy and Make’ category.
“This does not promote setting up joint venture or co-production arrangements in India by big foreign original equipment manufacturers. In order to obviate the above shortcoming, the Buy and Make (Indian) category is being introduced, which allows issue of request for proposals to Indian industries having requisite financial and technical capabilities to absorb technology and undertake indigenous manufacture through transfer of technology and not through research and development,” the minister said.