anant_s
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NEW DELHI: With the eventual aim to get rid of India's embarrassing tag of being the world's largest arms importer, the government on Monday revised the defence procurement procedure (DPP) with a pronounced thrust on the "Make in India" policy.
The new DPP, which will be notified in another two months after some corrections and follow-up amendments, also lays down that offsets obligations will be applicable only in deals worth over Rs 2,000 crore, instead of the present benchmark of over Rs 300 crore. In other words, only those arms companies which bag deals over Rs 2,000 crore will have to plough at least 30% of the contract value back into India as offsets. Smaller deals will be exempt from the offsets obligation.
Defence minister Manohar Parrikar, after chairing the defence acquisitions council in the evening, also said the liberalized and nuanced norms for blacklisting as well as hiring of authorized representatives by arms companies will also be finalised in two months.
Pointing out that the UPA government's wholesale and indiscriminate blacklisting policy had often proved counterproductive by adversely impacting the modernisation of the armed forces, Parrikar said: "We have to take into account our strategic interests also. I will go by national interest."
Similarly, as was first reported by TOI earlier, the hiring of agents or "authorized Indian representatives" - which are not to be confused with illegal middlemen - by foreign arms companies will also be liberalised. "The representative (or agent) should be paid a reasonable fee...he should not be a commission agent or be paid depending on the cost of a deal or the success or failure of the deal," said Parrikar.
The minister said the revised DPP gives top priority to the new indigenous design, development and manufacturing (IDDM) category under "Buy Indian" to inject a much-needed booster dose into the country's fledging indigenous defence industrial base (DIB) by encouraging the private sector - including micro, small and medium enterprises -- to enter arms production in a major way.
The new DPP will also include the guidelines for the government plan to enter into "strategic partnerships" with select domestic private sector companies in six critical areas, ranging from aircraft and warships to tanks and guided missile systems.
Apart from the Make in India thrust, the new DPP also seeks to streamline the entire arms acquisition process by cutting down on the existing long delays. The time lag between a case getting "acceptance of necessity" (AoN) and the tender or request for proposal (RFP) for it being floated, for instance, will be cut down. The service concerned now will have to submit a draft RFP along with its AoN proposal for approval.
As of a now, it takes around a year, if not more, for the RFP to be floated after a case gets AoN. The subsequent trial and commercial evaluation of the equipment fielded by the competitors further takes a few years before a contract is anywhere close to being inked. The entire process, of course, is also often derailed by complaints and corruption allegations, leaving the service concerned without the weapon or platform it wanted for years on end."While procedures are important and need to be followed, the aim is to reduce the number of steps and infuse some trust in the process...you can't keep on checking the same thing again and again. The revised DPP will reduce timelines across various stages of procurement to enhance efficiency and effectiveness," said Parrikar. He added that single-vendor situations will not necessarily be foreclosed if there is proper justification to carry on with the procurement process.
As per the new DPP, the RFP for any equipment purchase will now have "essential" as well as "desirable" technical parameters or staff qualitative requirements (SQRs). The essential parameters, in turn, will include what have to be proven at the trial evaluation stage and what will need to be present in the final product.
"The RFPs will also contain enhanced performance parameters to provide for additional capabilities over and above the essential parameters. Vendors which meet them will be provided additional credit score while evaluating their product cost," said the minister.
Centre's 'Make in India' push in defence procurement - Times of India
--------------------------------------------------------------------------------------------------------------------------------
@Abingdonboy @SpArK @AUSTERLITZ @scorpionx
Finally some sensibility and thought going into a serious policy matter.
The new DPP, which will be notified in another two months after some corrections and follow-up amendments, also lays down that offsets obligations will be applicable only in deals worth over Rs 2,000 crore, instead of the present benchmark of over Rs 300 crore. In other words, only those arms companies which bag deals over Rs 2,000 crore will have to plough at least 30% of the contract value back into India as offsets. Smaller deals will be exempt from the offsets obligation.
Defence minister Manohar Parrikar, after chairing the defence acquisitions council in the evening, also said the liberalized and nuanced norms for blacklisting as well as hiring of authorized representatives by arms companies will also be finalised in two months.
Pointing out that the UPA government's wholesale and indiscriminate blacklisting policy had often proved counterproductive by adversely impacting the modernisation of the armed forces, Parrikar said: "We have to take into account our strategic interests also. I will go by national interest."
Similarly, as was first reported by TOI earlier, the hiring of agents or "authorized Indian representatives" - which are not to be confused with illegal middlemen - by foreign arms companies will also be liberalised. "The representative (or agent) should be paid a reasonable fee...he should not be a commission agent or be paid depending on the cost of a deal or the success or failure of the deal," said Parrikar.
The minister said the revised DPP gives top priority to the new indigenous design, development and manufacturing (IDDM) category under "Buy Indian" to inject a much-needed booster dose into the country's fledging indigenous defence industrial base (DIB) by encouraging the private sector - including micro, small and medium enterprises -- to enter arms production in a major way.
The new DPP will also include the guidelines for the government plan to enter into "strategic partnerships" with select domestic private sector companies in six critical areas, ranging from aircraft and warships to tanks and guided missile systems.
Apart from the Make in India thrust, the new DPP also seeks to streamline the entire arms acquisition process by cutting down on the existing long delays. The time lag between a case getting "acceptance of necessity" (AoN) and the tender or request for proposal (RFP) for it being floated, for instance, will be cut down. The service concerned now will have to submit a draft RFP along with its AoN proposal for approval.
As of a now, it takes around a year, if not more, for the RFP to be floated after a case gets AoN. The subsequent trial and commercial evaluation of the equipment fielded by the competitors further takes a few years before a contract is anywhere close to being inked. The entire process, of course, is also often derailed by complaints and corruption allegations, leaving the service concerned without the weapon or platform it wanted for years on end."While procedures are important and need to be followed, the aim is to reduce the number of steps and infuse some trust in the process...you can't keep on checking the same thing again and again. The revised DPP will reduce timelines across various stages of procurement to enhance efficiency and effectiveness," said Parrikar. He added that single-vendor situations will not necessarily be foreclosed if there is proper justification to carry on with the procurement process.
As per the new DPP, the RFP for any equipment purchase will now have "essential" as well as "desirable" technical parameters or staff qualitative requirements (SQRs). The essential parameters, in turn, will include what have to be proven at the trial evaluation stage and what will need to be present in the final product.
"The RFPs will also contain enhanced performance parameters to provide for additional capabilities over and above the essential parameters. Vendors which meet them will be provided additional credit score while evaluating their product cost," said the minister.
Centre's 'Make in India' push in defence procurement - Times of India
--------------------------------------------------------------------------------------------------------------------------------
@Abingdonboy @SpArK @AUSTERLITZ @scorpionx
Finally some sensibility and thought going into a serious policy matter.
