Twitter
Advertisement

Govt seeks industry recommendations for new Defence Procurement Policy

The Indian industry believe that the current procedure does not give them a level playing ground.

Latest News
article-main
FacebookTwitterWhatsappLinkedin

Even as the Ministry of Defence (MoD) is working on a new ‘simplified and time bound’ defence procurement procedure (DPP), a committee comprising Indian defence industry representatives has been asked to give its suggestions to the government by the end of June.

Sources told dna that the committee has been formed after closed-door meetings between the MoD officials and industry members representing the three prominent industry bodies Ficci, CII and Assocham. These meetings have been happening since recently to address the regulatory and procedural challenges the domestic industry face or are likely to face in benefiting from the foreign investments in defence industry, especially in the light of the high-octane ‘Make in India’ drive.

Meanwhile, the government-industry meetings will continue to happen to iron out the difficulties faced by the domestic industry, a senior MoD official said.

While the government is brainstorming on easing the blanket ban on blacklisted firms and formalising the engagement of ‘middlemen’ in procurement, among other things,  to make the process transparent and easy, the new DPP is also likely to accommodate some unique concerns of the indigenous industries.

The Indian industry believe that the current procedure does not give them a level playing ground. For example, they have a tougher offset business obligations to stick to especially in terms of payment terms and conditions. 

A closed door meeting between the MoD and industry representatives which happened on Tuesday focused on integration of small and medium enterprises in the Make in India realm, a source said.

A foreign contractor having bagged government orders above Rs 300 crore is required to source components from local vendors for at least 30 per cent of that value, according to India’s offset policy. 

Foreign defence deals between 2007 and 2012 helped realise Rs 20,000 crore for offset business in India and domestic defence industry pegs the estimated potential of the offset business at Rs 60,000 crore in the light of the ‘Make in India’ drive.  

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement