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India Defence Online, New Delhi –The Indian private sector has finally been given an equal footing with state-run entities as the Indian government will allow private Indian shipyards to construct naval ships. The Defence Minister A K Antony has said that starting January 2011, state owned shipyards will have to compete with private ones for ship building contracts.
Hence, the Defence Acquisition Council (DAC) will no longer give any nominations to the defence shipyards for naval projects and they will have to compete with the private shipyards for the tenders. This major policy shift has been affected for the Indian Navy and will later be extended to acquisition by the Indian Army and Indian Air Force (IAF) as well.
The Indian Defence Ministry has also indicated the need for stronger indigenisation and cited that the “Buy Indian Make Indian’ will remain the major policy when it comes to procurement as this will augment a strong defence industrial base.
The current policy shift is a major impetus for private players who are in the shipbuilding business and will now be able to contest for building naval warships. This domain of building naval ships has been exclusive only to state-run firms until now. In fact, the Defence Ministry has cautioned the public sector units (PSUs) and the Ordnance Factory Board (OFB) to be ready for more competition from the Indian private sector.
The Indian private shipyards have been pinning their hopes on the Indian defence sector for some business. Companies like ABG Shipyard, Bharati Shipyard and Pipavav Shipyard have been tying up with international engineering companies like Rolls Royce, Wartsila Diesel and Yanmer Marine, among others, to get a share of the Indian defence sector. Pipavav Shipyard has been keen on the defence sector and is presently looking at various kinds of vessels for the Navy, which will be more complex and weapons-oriented. Bharati Shipyard has also built vessels for the Indian Navy in the past and is keen to work for the Coast Guard and the Indian Navy and build up volumes by actively participating in the Indian naval warships project. ABG Shipyard also hopes to secure orders for bigger vessels and bigger defence orders as the global shipping market is in turbulent waters. The private shipbuilding industry can have a multiplier effect on India’s economic output and can significantly increase indigenisation.
Indian defence news and strategic intelligence
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