Ministry of Defence
07-February, 2018 15:53 IST
Make In India
Inter-alia, the Aatre Task Force recommendations on selection criteria of an Indian company as Strategic Partner were examined in the Ministry and the Strategic Partnership (SP) policy has been promulgated on 31.05.2017 as Chapter VII of the Defence Procurement Procedure (DPP) – 2016 titled as “Revitalising Defence Industrial Ecosystem through Strategic Partnership” with an aim to institutionalise a transparent, objective and functional mechanism to encourage broader participation of the private sector, in manufacturing of major Defence platforms. It will serve to enhance competition, increase efficiencies, facilitate faster and more significant absorption of technology, create a tiered industrial ecosystem, trigger innovation, promote participation in global value chains as well as exports leading to reduction in dependence on imports and gradually ensure greater self-reliance and dependability of supplies essential to meet national security objectives. The chapter is available at Ministry of Defence Website:
https://www.mod.nic.in.
Four segments have been identified i.e. Fighter aircraft, Submarines, Helicopter and Armoured fighting Vehicles and till date three Request for Informations (RFIs) have been issued under the Strategic Partnership Model for Submarines, Naval Utility Helicopter and Future ready Combat Vehicle (FRCV).
This information was given by RakshaRajyaMantriDr.SubhashBhamrein a written reply to ShrimatiRanjeetRanjan and Shri Rajesh Ranjanin LokSabha today.
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Ministry of Defence
07-February, 2018 15:52 IST
Self Reliance in Defence Production
Self-reliance is a major corner-stone on which the military capability of any nation rests. Accordingly, the Defence Production Policy promulgated by the Government, aims at achieving substantive self-reliance in the design, development and production of equipment, weapon systems, platforms required for defence in as early a time frame possible, creating conditions conducive for private industry to play an active role in this endeavour; enhancing potential of SMEs in indigenisation and broadening the defence R&D base of the country.
Defence manufacturing is primarily driven by capital acquisition of defence equipment. Under ‘Make in India’ initiative of the Government, several measures have been taken to promote indigenous design, development and manufacture of defence equipment in the country by harnessing the capabilities of the public and private sector. These measures include according preference to procurement from Indian vendors under the Defence Procurement Procedure (DPP), simplification of Make procedure, introduction of simplified procedure for Make II sub-category, liberalization of the licensing regime and FDI policy by raising the cap on FDI in the defence sector, simplification of export procedure, streamlining of defence offset guidelines etc. Recently, the Government has notified the ‘Strategic Partnership (SP)’ Model which envisages establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, wherein they would tie up with global Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.
The expenditure on purchase of defence equipment from Indian vendors for the three services during the last three years, is as given below:-
CAPITAL EXPENDITURE:
(Rs. in crore)
Total Procurement
Procurement from Indian Vendors
2014-15
65583.77
39598.91
2015-16
62341.86
39149.64
2016-17
69150.12
41872.03
The Defence Procurement Procedure (DPP) provides various avenues for interaction with the industry. Headquarters Integrated Defence Staff (HQIDS) / Service Headquarters (SHQs), as the case may be, through regular and structured interactions, shares the details of procurement schemes with the industry, and the industry is involved at the feasibility stage itself. Draft Preliminary Services Qualitative Requirements (PSQRs), indicative time frame and envisaged quantities of schemes are shared with the industry. HQIDS / SHQs upload the broad details of the scheme on Ministry of Defence and SHQ websites. The Categorisation committees viz., Services Capital Acquisition Categorisation Committee (SCAPCC) / Services Capital Acquisition Categorisation Higher Committee (SCAPCHC) also invite industry representatives, associations / representatives nominated by industry associations, for presentation and clarifications, as and when required.
No target is fixed for import of defence equipment. Defence equipment is being imported from various countries as per the operational requirements of the Armed Forces.
During the last three financial years and current year (upto 30.11.17), 119 contracts involving Rs 1,16,523 crore have been signed with Indian vendors and 68 contracts involving Rs.1,24,291 crore have been signed with foreign vendors for capital procurement of Defence equipment for Armed forces including rockets, simulator and component level repair facility for Tanks from Russia, Laser Designation Pods, radars, Pods for aircraft Radios, Weapons for Garuds and Missiles from Israel, Aircraft, Helicopters, Missiles, Artillery Guns and Simulators from USA and Aircraft, Ammunition, High Zone Modules of Bi-Modular Charges from 155mm Guns from France.
Department of Industrial Policy & Promotion (DIPP) vide Press Note No.5 (2016 Series) has notified revised FDI policy under which FDI is allowed under automatic route upto 49% and beyond 49% through Government route wherever it is likely to result in access to modern technology or for other reasons to be recorded. Further, defence industry is subjected to industrial license under Industries (Development & Regulation) Act, 1951 and manufacturing of small arms and ammunition under the Arms Act, 1959 and Arms Rules, 2016. Other conditions as per the said press note are as follows:-
- Infusion of fresh foreign investment within the permitted automatic route level, in a company not seeking industrial license, resulting in change in the ownership pattern or transfer of stake in by existing investor to new foreign investor, will require Government approval.
- License applications will be considered and licences given by the Department of Industrial Policy and Promotion, Ministry of Commerce & Industry, in consultation with Ministry of Defence and Ministry of External Affairs.
- Foreign investment in the sector is subject to security clearance and guidelines of Ministry of Defence.
- Investee Company should be structured to be self-sufficient in areas of product design and development. The investee / joint venture company along with manufacture facility should have maintenance and life cycle support facility of the product being manufactured in India.
This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Shri Ramesh Chander Kaushik and others in Lok Sabha today.
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Ministry of Defence
07-February, 2018 15:51 IST
Training for Defence Procurement
For acquisition of defence equipment and the modernisation of our Armed Forces, the procedures prescribed in various manuals and rules including the Defence Procurement Procedure – 2016 (DPP) and the Defence Procurement Manual 2009 (DPM) are followed. DPP deals with the acquisition of new capital equipment and DPM with revenue procurements as well as the provision of all other goods, services and support activities intended to maintain the operational effectiveness of our Armed Forces. The Indian Armed Forces follow an approach of continuous training of its officers wherein each officer at different stages of his / her career undergoes various training courses of different contents and durations. As part of these courses, the officers are provided introductory training in various issues concerning procurement. This training is both built into the curriculum and also covered by means of lectures by guest speakers. Besides, training on financial management at macro level is provided to the officers which also covers various aspects related to defence procurement. Specialist courses are also conducted at Service, Tri-service and Ministry of Defence level at Material Management Institute of IAF, College of Defence Management of IDS and Defence HQ Training Institute, Ministry of Defence.
In addition, officers dealing with defence procurements are encouraged to attend seminars, capsule courses or other similar events conducted by various industry chambers and institutes such as National Institute of Financial Management, Faridabad. All these assist in developing the required knowledge base among the officers for handling issues related to defence procurement.
There are adequate number of experienced and trained officers to handle defence procurement. However, in view of the position indicated in reply to part (a) and (b) above, training of officers on procurement matter being a continuous process of knowledge upgradation, it is not possible to give exact number of trained officers.
This information was given by RakshaRajyaMantriDr.SubhashBhamre in a written reply to Shri Hariom Singh Rathorein Lok Sabha today.
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