Make in India: Defence procurement policy may have a local production clause, says Manohar Parrikar

MUMBAI: The new defence procurement policy may have mandatory local production clause with technology transfer as part of the government’s Make in India programme, minister of defence Manohar Parrikar said on Monday.

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For certain categories, the government is likely to stipulate mandatory local sourcing clause, he told reporters at the Make in India week. Parrikar said even as there is a push for local production, there is need to improve transparency in the defence procurement procedure (DPP), which can help reduce cost by 20-25 per cent without compromising on quality. He said the government has finalised the DPP and it been approved by the Defence Acquisition Council (DAC). "If Make in India goes at the same speed, ( GDP) growth will be in double digits, definitely more than the current 7-8 per cent," Parrikar said.

The minister said that while there will be a push to local manufacturing, "not all items can be produced here" as there will be some specialised parts that will have to be imported, and localisation also depends on the volume content.


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"A slow revolution is coming up in India," Bharat Forge chairman Baba Kalyani said. "The DPP will change the whole balance from 70-75 per cent imports to 70-75 per cent local sourcing. That will have huge benefits for companies like ours," he said.

The minister said that since the time he took over, as ma370 manufacturing licences have been issued and about 50 memoranda of understanding have been signed with multinationals.

On the decision of the Barack Obama administration in the US to sell eight F-16 fighter jets worth $700 million to Pakistan, Parikkar said, "Only a notification for the proposed supply of F-16 planes to Pakistan has happened by the US Congress. However, we have already raised an objection with the US on the move."