Dilution of stringent conditions, removing nomination based Defense Public Sector Undertaking (DPSU) contracts, and setting indigenization target with a time frame will encourage Indian domestic companies to take part in defense equipment manufacturing.
The Indian government should set indigenization target within a time frame to encourage domestic companies to take part in Defense equipment manufacturing. Unless it is done, the home-grown companies will not be able to participate in the multi-billion dollar defense procurement, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) said in a statement Tuesday.
In a detailed representation submitted to the Defense Ministry, the chamber has said, “stringent conditions” which block the entry of domestic firms into the defense procurement of the government should be diluted. This should be done “in order to make it easier and more attractive for Indian vendors who are investing in high risk areas”.
It said the existing arrangement of contracts to be awarded to Defense Public Sector Undertaking (DPSU) on a nomination basis proves to be disincentives for the private players, “thereby leading to lack of level playing field for the private players”. ASSOCHAM strongly recommended that the provision for nominations should be deleted / restricted to clearance by Cabinet Committee on Security (CCS).
“With billions of dollars worth of Defense contracts going to foreign firms, the Indian firms are denied access to the same, mostly on the ground of lack of track record and experience. It is a chicken and egg situation”, noted the chamber.
“Unless, the home –grown firms are allowed entry, how would they get experience and track record? The entire mind set and system of procurement should be changed in a manner to support domestic industry and entrepreneurship. Several Indian companies like Mahindra and Mahindra, Tata group, Ashok Leyland and several others have built capabilities which are world class. However, more players need to join the defense purchases”, ASSOCHAM Secretary General D S Rawat said.
Following the letter and spirit of the government’s flagship program ‘Make in India’ the indigenization target should be achieved in different phases. There is also a case for a review of the field trial parameters and methodology, the chamber’s communication to the government suggested.
It said eligible private sector players are currently not allowed to participate in a majority of programs where they have both the technical and financial competence to deliver the project because of nomination of such programs to DPSUs. “Nomination in such cases is detrimental to the objective of creating a vibrant private sector defense industry which is one of the prime recommendations of the Kelkar Committee.
It also does not allow private industry to have relevant experience which forecloses participation in future related programs/projects. ASSOCHAM firmly opposes this practice of Nomination and requests the government to allow for eligible private sector players to participate along with the DPSUs in a fair competition”.
In case a private sector system integrator meets the financial and technical capability specified in an RFI/RFP along with a minimum threshold specified for indigenization for the project, then for such a firm not having a track record should not be criteria not to allow for the firm’s participation in the Request for Information (RFI)/ Request for procurement (RFP) process, the chamber said.
A proposed defense electronics policy seeks to transfer some of the semiconductor and systems manufacturing by public sector undertakings to the Indian private sector. The policy is being prepared by the Indian Electronics and Semi -conductor Association (IESA) and the National Association of Software and Services Companies (NASSCOM) under direction of the MoD
India has so far received US$ 5.02 million (INR 32 crore) in Foreign Direct Investment (FDI) in the defense industry sector
Even after increasing production of the Rafale Fighter from the present 11 a year to three a month, Dassault may find it difficult to commit early deliveries to India. While negotiations for the purchase of 36 Rafale aircraft have commenced between the French and the Indian governments, Dassault is facing the challenge to scale up production within a relatively short time to fulfil its existing contracts with Egypt, Qatar and the French Air Force (FAF)
Indias latest Defense Procurement Procedure (DPP) will lay more emphasis on homegrown proposals with increase in indigenous content threshold for ‘buy Indian and ‘buy and make Indian categories. According to Indian Express News Daily, the committee formed by Defense Minister Manohar Parrikar to revise the DPP is laying emphasis on promoting “Make In India” in the defense sector
Indias latest Defense Procurement Procedure (DPP) is likely to propose alternative mechanisms to curb corruption instead of blacklisting defense manufacturers. The new DPP to be announced next month is considering ‘negotiated resolution with the accused company similar to ‘deferred prosecution agreements (DPA) followed by UK and US, according to Indian Express news daily report on Thursday
India has exported defense equipment worth INR 670 crore (US $104 million) that include helicopters, bullet proof jackets, aircraft spares and military hardware to 22 countries in 2014-15. India has exported forging equipment, electronic assemblies, flight control panels to the US, transmitting tubes to UK and MIG, Sukhoi Su-30 aircraft spares to Russia and Malaysia, DNA news daily reported Thursday
Boeing has ended $4.7 million contract with Indian Hindustan Aeronautics (HAL) citing shoddy production quality of components for the nations P-8I Poseidon maritime patrol aircraft and F/A-18E/F Super Hornet
India faces serious shortage of ammunition especially for tanks and artillery and has stocks enough for only 10 days of war. The Comptroller and Auditor General of India (CAG) had noted in May this year that stocks of 125 out of 170 kinds of ammunition or, to put it differently, 74 per cent of the total stocks are not enough for even 20 days of a shooting war
Indian Sukhoi-30 MKI Aircraft Test Fires Homegrown Guided Bomb
Trump Uses Emergency Authority to approve $8 B Arms Sales to Saudi,
Angola Receives Last Batch of Su-30K Fighters From Belarus
Rand Corporation Suggest Options to "Overextend and Unbalance" Russia
Russian state-run Almaz-Antey has released additional data on its latest export-version of Buk-M3 Viking air defense missile system (ADMS)
The MiG-29, one of Russias most exported military jet has been upgraded in India that expands its capabilities from an...
Russian fifth generation fighter aircraft (FGFA) Su-57 will for the first time perform flights during the ARMY 2018 event near...
The American-made Patriot and Russian S-400 Triumf air defense systems are currently hogging international orders despite their price tags running...
The Russian ministry of defense on Thursday published a series of videos showcasing the production, deployment and installation and testing...
The market for fighter jets in countries which are expected to have open competitions is estimated at US$50 billion to...