'Strategic Partnership' model in defence gets Union Cabinet approval
- Author: Zachary Reyes May 25, 2017,
May 25, 2017, 17:00
The cabinet's approval comes just days ahead of Prime Minister Narendra Modi's visit to strategic partner countries including Germany, Spain and Russian Federation from May 26.
In a major boost to the defence manufacturing sector in India, the cabinet on Wednesday approved a policy that would enable domestic companies to tie up with global partners and manufacture all forms of defence equipment in India. "As it is an important issue, the Cabinet took note of it", he told the media.
"Under the policy, the capacity of Defence PSUs will also be taken into account, how much work they can do, and capacity building in private sector in the field of defence in the country should begin now", he asserted.
"With all the effort that has gone into finalising the policy, it can potentially be a turning point in India's endeavour to have a robust home-grown private defence industrial base".
Patil said that industry representatives had raised concerns in recent meetings about how the policy would be structured, specifically on the financial and technical criteria used for selecting partners. A special committee had made some recommendations regarding some sub sectors - helicopters, armoured vehicles, submarines, fighter aircraft, and tanks. Jaitley said the strategic partner for each category will be selected through a bidding process.
Once the partnership is formed between the Indian companies and the foreign original equipment manufacturer, the government would give an assured order to continue with the production. The private sector has been pushing for the SP model and even a number of foreign defence majors were looking forward to it.
"Defence preparedness itself necessitates that you procure domestically and manufacture domestically. We will assess the policy fine print when it is released", Pierre de Bausset, President & Managing Director, Airbus in India said in an email. These platforms will be manufactured under the government's flagship "Make in India" programme and one private sector strategic partner for each of these sector will be chosen.
It was proposed in 2015 by Dhirendra Singh Committee. Last year, the then defence minister Manohar Parrikar had announced that the policy on SP model would be unveiled soon.