Defence Procurement Procedure to boost “Make in India” initiative

Newsroom24x7 Desk

AgustaWestland will build AW119 helicopters in India under a joint venture with Tata Sons

AgustaWestland will build AW119 helicopters in India under a joint venture with Tata Sons

New Delhi: The new Defence Procurement Procedure (DPP) 2016 focuses on a boost to the ‘Make in
India’ -initiative of the Government of India, through Indigenous design, development and
manufacturing of defence equipment, platforms & systems.

The ‘Make’ procedure has been simplified to ensure increased participation of the Indian industry. Enhancing the role of MSMEs in defence sector, and cutting down permissible timeframes for various procurement activities, are the other defining features of DPP-2016.

The new category – Buy (Indian-IDDM) refers to the procurement of products from an Indian vendors meeting one of the two conditions:

  • products that have been indigenously designed, developed and manufactured with a minimum of 40% Indigenous Content (IC) on cost basis of the total contract value; or
  • products having 60% IC on cost basis of the total contract value, which may not have been designed and developed indigenously. This category has been accorded the highest priority, to boost the indigenous defence industry.
  • Ministry of Defence has not received any complaints with regard to implementation of the new DPP- 2016.
Mahindra Defence and Airbus Helicopters have inked a pact to form a joint venture to produce military helicopters in India

Mahindra Defence and Airbus Helicopters have inked a pact to form a joint venture to produce military helicopters in India

This information was given by Defence Minister Manohar Parrikar in a written reply to Bhagwanth Khuba and others in Lok Sabha today.
Foreign Investment in Defence Sector

On the issue of foreign investments, the defence Minister told the House that Several MoUs and Agreements have been signed between Indian and foreign companies for setting up joint ventures. However, he added, the actual flow of Foreign Direct Investment (FDI) takes time to mature. From August 2014 to February 2016, a total amount of Rs. 112.35 lakhs has come into the country as
FDI in defence sector.

Ministry of Defence has neither entered into nor is there any proposal at present to enter into any framework agreement with Israel for supply of arms, military equipment and  technology transfers in the defence sector. However, Government has entered into contracts with Israeli firms for supply of defence equipment with Transfer of Technology or work-share arrangements.

Contracts with Israeli firms for supply of defence equipment with Transfer of Technology

The government of India has entered into contracts with few Israeli firms for supply of defence equipment with Transfer of Technology or work-share arrangements. The divulgence of details will not be in the interest of national security.

In addition, Defence Research & Development Organisation (DRDO) has several defence Research & Development programmes with Directorate of Defence Research and Development (DDR&D) of Israel. Under  this, Israel shares technology information, know-how, know-why and undertakes collaborative research projects. DRDO and DDR&D meet annually under the aegis of Indo-Israel Management Council
(IIMC) to pursue and discuss defence R&D activities.

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