New defence policy: Emphasis on MSMEs, 'Make in India' focal point

NEW DELHI: India's new policy on defence procurement is heavy on industry involvement - from roping in private sector companies from the feasibility stage itself to hiring professionals to draft tenders and starting off with a preamble that describes ' Make in India' as the focal point.

Follow @ETDefence Twitter handle for comprehensive coverage on other buzzing Defence stories

Manohar Parrikar's ministry is finalizing the defence procurement policy that is likely to be released at the end of this month and a draft copy accessed by ET reveals heavy emphasis on involving the industry and a focus on enhancing the role of MSMEs.

Changes include the introduction of a preamble that will be the `guide' for all decisions, new categories for procurement to prioritize locally developed equipment and deep interaction with the industry at every stage of procurement.

"It is of utmost importance that the concept of Make in India remains the focal point of our defence acquisition policy. There is a need to institute enabling provisions for utilization and consolidation of design and manufacturing infrastructure available in the country," the policy preamble reads.

The policy makes it clear that `the industry may even be involved at the feasibility stage itself' for major weapon buys and that the services should share details like preliminary service quality requirements and envisaged quantities at the earliest with the private sector.

At the early stage of a request for information itself, `extensive interactions with the vendors' will be planned by services and provisions have been made to hire `professional technical experts' to draw up tender requirements.

Contrary to expectations, the new policy borrows heavily from the last edition of the Defence Procurement Policy that was announced in 2013 but several new categories have been included, including top priority for Indian Designed, Developed and Manufactured (IDDM) products.

Officials say that while six of the seven chapters of the DPP are likely to be finalized before the end of this month, a chapter of strategic partners - the select private sector players for major contracts - is likely to be notified separately at a later stage.

The four point preamble is described as the guiding light of the new policy and in case of `not foreseen' situations, `necessary guidance to determine the appropriate course of action' would be taken from it by the highest decision body on procurements - the defence acquisition committee.