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During an important conference held at the DEF Expo 2010 titled ‘Defence Procurement- Movement from Offsets to Buy and Make Indian’, India’s drive towards indigenization in the defence production sector and reduction of imports is being envisaged by amending the Indian defence procurement policy (DPP). The conference also held discussions on issues such as making defence offsets transparent as well as user and investment friendly and creating synergy between foreign Original Equipment Manufacturers and local Indian industry and the Ministry of Defence.
Mr. Shashi Kant Sharma, Director General (Acquisition), Ministry of Defence, said that the DPP was not an end in itself but a vehicle to meet the larger goal of security of the nation. He added that the changes attuned to value addition, focus on critical technologies, a conducive taxation regime and strengthening of the R & D base are expected to be unveiled by September this year.
This conference at DEF EXPO 2010 was addressed by Mr. Satyajeet Rajan, Joint Secretary (Export), Ministry of Defence (MoD), Mr. K P Singh, former Secretary (Defence Production), Mr. Rahul Chaudhry, CEO-Tata Power SED & Co-Chairman of FICCI Defence Committee among other government and private sector dignitaries.
During the DEF EXPO 2010 seminar, the recent steps in the procurement policy taken bythe Indian government were discussed. India has recently reviewed the Defence Procurement Procedures and some meaningful measures have been taken up. One of the primary examples has been the recent introduction of “Buy and Make (Indian)” category in the defence acquisition process which will enhance participation by the local industry, meeting requirements of advanced defence systems and platforms by getting into tie ups with technology providers and creating more joint ventures. In capital acquisition cases categorised as “Buy and Make (Indian)”, the Request for Proposal will be issued to those Indian industries that have requisite financial and technical capabilities to enter into joint ventures. The local players must be competent enough to absorb technology and undertake indigenous manufacture.
The recently adopted “Buy and Make (Indian)” category in DPP is similar to the “Make” category that already exists. The new procedure entails that the production and development by the Indian industry will be through Transfer of Technology and not through Research and Development. This provides companies an opportunity to pursue tie ups and joint ventures as “Buy Indian”; “Buy and Make Indian”; and “Make” will be the preferred categories with option of “Buy Global” being resorted to only where equipment with requisite Qualitative Requirements are not possible to be procured through these methods in the required time frame.
The recent acquisition reforms in India and the modernization drive of the Indian Armed Forces makes the Indian defence sector a lucrative market with added impetus for joint ventures and technological collaborations. The collaborations in the field of defence research and development and tie-ups in critical technology areas to meet the requirements of armed forces indigenously is needed to help Indian defence sector flourish.
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