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In an effort to expedite the release of the ‘strategic partners’ (SP) policy under the revised defence procurement procedure (DPP), Defence Minister Arun Jaitley will be chairing a meeting with all stakeholders on May 11.
Jaitley, along with senior officials from the Defence Ministry, will be meeting industry representatives on May 11 to discuss the final draft before it is taken up for approval by the Defence Acquisition Council (DAC) chaired by Jaitley by May 15, sources told BusinessLine requesting anonymity.
The chapter on SP, which will be inducted in the DPP 2016 once finalised, is aimed at boosting manufacture of defence items through big ticket contracts within the private sector. It is largely divided into segments – submarines, combat aircraft, warships and helicopters, and armoured vehicles.
The idea is to enlist private sector defence companies in each of these segments as strategic partners for long-term contracts.
A decision on the policy is expected to kick-start some long-pending programmes, such as P-75i Scorpene submarines, naval utility helicopters, single-engine aircraft and armoured vehicles. While the final outline of the policy will be known on May 11, industry has been asking for a policy that allows wider participation to avoid creation of monopolies, sources said.
Some key industry recommendations are that a particular group should be treated as one entity to avoid multiple applications, no inter-segment and intra-segment restrictions should exist, and two or more SPs should be allowed in each segment.
The industry has also suggested sub-segments.
“This will not only result in faster deliveries but also ensure that capability creation is not restricted to one company and one location with associated business and natural calamity risks,” said the CEO of an Indian defence firm, who refused to be named. For the policy to be successful, key issues raised by industry will “have to be addressed”, else it will run the risk of failure, the CEO added.
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