Economy

Defence procurement: arms majors want simpler norms

Nayanima Basu New Delhi | Updated on January 22, 2018

PIERRE DE BAUSSET, President, Airbus Group India

KISHORE JAYARAMAN, President, Rolls-Royce India

Call for changes in offset policy, tender-contract timeframe





Global arms manufacturers such as Airbus, Rolls Royce, and BAE Systems want the new Defence Procurement Procedure (DPP) to make the acquisition process simpler. They want it to cut down costs and bring greater clarity in long-term defence forecasts with further modification of the offset policy.

DPP 2015, which was expected to be rolled out in May-June, is set to be unveiled shortly.

“I expect the new DPP to simplify the defence acquisition process so as to make it lucid and cut down the time between floating a tender and awarding a contract. The policy should be result oriented and balance procedure with a degree of flexibility, so that the desired capabilities can be procured in a transparent, timely and cost-efficient manner,” said Pierre de Bausset, President, Airbus Group India.

He added that unlike DPP 2013, the revised version should seek to bring in the viewpoints of all stakeholders, be it the armed forces or the bureaucracy.

India is among BAE Systems’ top defence markets globally, according to Mark Simpkins, the company’s Vice-President and General Manager (India). However, it believes the offset policy, which makes it mandatory for foreign players to invest 30 per cent of the value of their contract in the Indian industry, requires modification.

Make in India

“The Indian offset policy has evolved over a period and reached a fairly mature stage. However, with further modification, offsets can become a success factor for ‘Make in India’ for defence and we hope to see further progress in this aspect in the DPP,” Simpkins told BusinessLine.

Kishore Jayaraman, President, Rolls-Royce India and South Asia, wants the new DPP to be more flexible and transparent.

“To encourage private sector participation, the government will need to share long-term demand forecasts, agree to reasonable profit rates and either guarantee long-term revenues or invest in capability creation,” he said.

In order to the make the new DPP markedly different from the older one, the Ministry of Defence had constituted a 10-member committee under former Home Secretary Dhirendra Singh.

Last week, Defence Minister Manohar Parrikar had said the new DPP will be mostly based on the recommendations of that committee, submitted in July.

Published on November 30, 2015

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