Defence Ministry firms up new procurement policy

NEW DELHI: Stung by scams in acquisition from foreign vendors, the Defence Ministry today finalised a new procurement policy under which Indian public and private sector will be given first priority for military procurements and will help in plugging loopholes that allow corruption.

To avoid scams such as the AgustaWestland chopper deal and enhance transparency, the Ministry also approved a proposal under which Services headquarters would be required to freeze specifications of the desired products before they are approved by the Defence Acquisition Council (DAC).

The new changes in the policy will also end the virtual monopoly of the PSUs and ordnance factories in the defence sector as they will not be automatically nominated for maintenance and repair of systems procured from abroad as the private firms will be allowed to take part in these contracts.

"Preference for indigenous procurement has now been made a part of DPP through an amendment that provides for a preferred order of categorisation, with global cases being a choice of last resort. The first option would be to buy from India followed by 'buy and make India'," the Defence Ministry said here.

Under the second category, private and public sector firms can tie up with foreign vendors and produce the equipment required by the armed forces within the country.

The meeting of the DAC headed by Defence Minister A K Antony also made it mandatory for the armed forces to explain to the Ministry that why they are not preferring to buy from Indian sources or excluding the higher category, the ministry said.

The other three categories include 'Buy and make with Transfer of Technology', 'Make' and the last option of buying the equipment from foreign vendors directly under the 'Buy (global) category.