India’s defence procurement process should be more transparent: Report

NAYANIMA BASU New Delhi | Updated on January 16, 2018

The US government is planning to sell its latest F-16 Block 70, as well as Sea Guardian drones in a deal worth $22 billion   -  G R N SOMASHEKAR

India needs to broaden its offset policy by amending the Defence Procurement Procedure it says

India should make its process of procuring defence equipment for the Indian Army, Navy and the Air Force more “transparent, efficient and effective” while not relying on the lowest cost approach, according to a report by the Centre for American Progress.

The report, ‘The United States and India: Forging an Indispensable Democratic Partnership’, was released here on Tuesday in collaboration with the Centre for Policy Research by former Ambassadors Nirupama Rao and Richard Verma.

“An improved procurement process will provide a level playing field and create a conducive environment for India to eventually become self-reliant in defence. US firms will be among the beneficiaries of a better defence acquisitions process and the integration of supply chains and development of joint R&D in defence will create jobs and lower costs in both countries,” the report said. According to the report. India needs to broaden its offset policy by amending the Defence Procurement Procedure (DPP).

Low-cost approach

“India should also reconsider whether its lowest cost approach to defence acquisition is in its national interest, as often the best valued and most capable systems are not the lowest cost ones,” the report added.

Referring to the pending defence pacts that India needs to sign with the US, former US envoy to India, Richard Verma, said that India is a “tough negotiator” and that it should come for negotiations with a “certain confidence” when negotiating sensitive agreements like defence foundational pacts. While India signed the Logistics Exchange Memorandum of Agreement (LEMOA) with the US in 2016, the remaining two — Communications Compatibility and Security Agreement (COMCASA) and Basic Exchange and Cooperation Agreement for Geospatial Information and Services Cooperation (BECA) — are yet to be signed.

These three pacts are crucial for India to sign as it is now being recognised as a ‘Major Defence Partner’ of the US. “There are hindrances on both sides when it comes to defence procurement,” said Rao, who is also Co-Chair at the Center for American Progress Task Force on US-India Relations and India’s Former Foreign Secretary.


The report also noted that a defence implementation agreement will potentially enable India to access a wide variety of benefits, including advanced technology, access to certain US intelligence, and secure communications links with US counterparts. The report also recommended that the US government agencies take effective steps to enhance defence cooperation between both countries.

“The US Congress could also be an important player in formalising the understandings reached in US law, so the understandings become ingrained in US policy and subsequent administrations are bound by the commitments,” it stated.

Presently, the US government is planning to sell its latest F-16 Block 70, manufactured by Lockheed Martin, in India in a deal worth $20 billion as well as Sea Guardian drones for $2 billion.

Published on January 16, 2018

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