HIGHLIGHTS
The defence acquisitions council (DAC), chaired by defence minister Arun Jaitley, also gave the green signal to the Army to go ahead with its long-term plan to induct three squadrons (39 choppers) of attack helicopters for its three “strike” corps, among other modernization proposals, said sources.
But the main takeaway was the SP policy under the “Make in India” thrust of the Modi government, which initially opens up four major segments of fighter jets, helicopters, submarines and armoured vehicles (tanks and infantry combat vehicles) for private sectors players.
TOI was the first to report that the SP policy would be cleared by the DAC this month as a major step towards building a robust domestic defence-industrial base, the absence of which means that India still imports 65% of its military requirements and can be strategically choked by foreign powers in times of conflicts.
The SP policy, which will now go to the Cabinet Committee on Security for final approval after the “smaller details” are worked out, is a clear message to the DRDO and its 50 labs, five defence PSUs, four shipyards, and the 41 factories under the Ordnance Factory Board (OFB) that they have largely failed to deliver the goods over the decades.
However, due to the stiff resistance put up by the public sector lobby against the SP policy, defence PSUs, shipyards and OFB will also be eligible to compete with private sector companies for selection as SPs in the submarine and armoured vehicle segments.
As per the SP roadmap, which will take almost a year to unfold, officials said only one company will be selected as the SP at a time in each of the four segments in “a transparent and competitive process” for the long-term partnership.
The defence ministry will select the companies on the basis of adequate financial strength (Rs 4,000 crore in annual turnover over the last three fiscals, capital assets of Rs 2,000 crore etc), demonstrable manufacturing and technical expertise, existing infrastructure and the ability to absorb technology from their foreign partners. A company’s record of “willful default, debt restructuring and non-performing assets” will also be taken into account by the defence ministry.
The foreign companies or original equipment manufacturers (OEMs) will be selected, in a separate but parallel process, primarily on the basis of the “range, depth and scope” of the transfer of technology (ToT) they are willing to offer. Other criteria will include the indigenous content, eco-system development, supplier base and future R&D, among other things.