India will release its Defense Production Policy and also introduce major changes to the delayed 2010 Defense Procurement Policy (DPP) in January 2011, Defense Minister A.K. Antony said. In anticipation of the move, many international companies have formed Indian subsidiaries. Meanwhile, the Associated Chambers of Commerce and Industry of India have recommended DPP 2010 should consider a higher foreign direct investment cap of 49 per cent to encourage foreign joint ventures.
The chamber also recommended that supplies of homeland security and dual-use items, technology-based projects and some sections of civil aviation engine parts and avionics should qualify as offsets. It is likely that some of these changes will be incorporated into DPP 2010 and be announced next year.
India currently imports 65-70 per cent of its defense equipment. India’s public sector shipyards will compete with its private shipyards to get projects for the Indian navy. All the Indian navy’s procurements in the future will be ‘Buy Indian, Make Indian.’ That will be the major’ component of our procurement policy. That will help us to have a strong defense industrial base in India. The need for government facilities to be cost-competitive – delivering quality standards and maintaining consistency – was stressed.
India imports about 70 per cent of its defence equipment. Since the public sector undertakings (PSUs) are not able to meet the defence forces’ requirements, the government is formulating a new policy, exporting the public sector units to compete with their private counterparts to realise the dream of “Buy Indian, Make Indian” which he claimed would be the major component of the new procurement policy. That will help us to have a strong defence industrial base in India. There was a plenty of space and opportunity for the public and the private sector to coexist and thrive, assured the PSUs and ordinance factories full financial support to prepare for competition. There is no option, but to remain globally competitive and efficient and not rest on past laurels, or achievements. There is need for R&D and constant coordination between the DRDO and the Industry Partners.
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A growing nation like India, a nation aspiring for the membership of the Security Council, a place on the high table of the nations, still depending heavily on foreign countries for supply of defence equipments is not good for us. Minister of State for Defence, MM Pallam Raju flagged the concern of timely delivery and uneven delays in the projects. During the financial year 2009-10, the 40 ordnance factories produced wide range of weapons and defence hardware amounting to Rs 8,751 crores while the total value of production by the nine defence PSUs was Rs 28,703 crores.