Ajay Kumar, Secretary, Department of Defence Production, on Friday said the defence sector received 50 suo motu proposals from MSMEs, including start-ups, under the simplified ‘Make II’ Defence Procurement Procedure over the last six months. One of the proposals has been accepted by the Indian Army.

Under the ‘Make in India’ programme, the Defence Acquisition Council had cleared a simplified ‘Make-II’ procedure to enable greater participation of industry in acquisition of defence equipment. The simplified procedure came into force in February 2018.

Unlike in the past, when defence procurements were need-based, the changed rules allow ‘suo motu’ proposals from the industry.

‘Sign of change’

“This is a great sign of change where the industry today is in a position to suggest best solution for the defence sector,” Kumar said over video conference at a seminar organised jointly by the Department of Defence Production and Bharat Chamber of Commerce in the city.

According to Kumar, the simplified ‘Make II’ procedure will bring innovative solutions in the defence industry and help bring down imports.

India is currently the world's largest importer of defence items, including arms, and it was time to change the status by going in for indigenisation, he said.

“Till about a couple of decades ago, this privilege (of being the largest importer) belonged to China before the baton was passed on to India. We should now see if we can pass on the baton to someone else,” he said. According to him, the Make II programme has been able to generate “a huge response” in the last six months. “In the last six months, 25 in-principle approvals have been issued and six EoIs (Expression of Interest) have been floated. These are large numbers, considering the usual time delays in defence procurement,” he said.

This has helped bring down the timeline for defence procurement by nearly one-third.

Defence offset fund

Srei Infrastructure has proposed the creation of a defence offset fund in which foreign suppliers can invest a part of their offset obligations, Hemant Kanoria, CMD, Srei, told newspersons on the sidelines of the defence seminar.

India’s offset policy mandates foreign suppliers to spend at least 30 per cent of the contract value in the country.

“We have presented this concept to the Ministry of Defence. All foreign companies having offset obligations can invest in this fund. There can be many such funds, which will provide equity support to MSMEs for innovations in defence,” he said.

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