1. Industry leaders to meet Jaitley today to discuss policy

Industry leaders to meet Jaitley today to discuss policy

Ahead of the Defence Acquisition Council (DAC) meeting next Monday, industry representatives are meeting the defence minister Arun Jaitley on Thursday to discuss issues related to the delay in government’s Strategic Partnership (SP) for defence.

By: | New Delhi | Published: May 11, 2017 3:16 AM
The SP policy aims to boost Prime Minister Narendra Modi’s ‘Make in India’ initiative by encouraging the private sector companies to boost defence production in the country and to create jobs. (PTI)

Ahead of the Defence Acquisition Council (DAC) meeting next Monday, industry representatives are meeting the defence minister Arun Jaitley on Thursday to discuss issues related to the delay in government’s Strategic Partnership (SP) for defence.

The SP policy was to be part of the amended Defence Procurement Procedure-2016 (DPP), but has not been finalised till now. According to the report, four projects are expected to be taken up in the first phase of the strategic partnership project, which will include manufacturing of new submarines, a naval utility helicopter, a single-engine fighter aircraft for the air force and armored vehicles for the army.

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The armed forces, the navy in particular, are keen to move fast on the SP concept to meet the urgent requirements and address the lack of equipment. Sources told FE, “The defence minister through interaction with the industry captains will try to understand the issues related to the delay in the finalisation of the most crucial chapter on SP. And will try to find a way of nominating SPs that is acceptable to all.”

The SP policy aims to boost Prime Minister Narendra Modi’s ‘Make in India’ initiative by encouraging the private sector companies to boost defence production in the country and to create jobs. Sharing his views with FE on the SP model, Puneet Kaura, managing director & CEO, Samtel Avionics, said, “The Strategic Partnership Model is the most ambitious project of the MoD, which has demonstrated commitment to empower its MSME sector through progressive indigenisation of defence manufacturing. According to an estimate, defence projects worth more than $35 billion hinge on the Strategic Partners Policy, and it has the potential to transform MSMEs with potentially huge trickle down of orders and technology transfer.”

Neeraj Gupta, managing director at Kanpur-based MKU Limited said, “The SP Model will help the companies to set up an eco system in the country as well as help in the indigenisation of the military platforms here in the country.”
The SP model was proposed after a report from a committee under former diiector general (acquisition) Dhirendra Singh suggested finding strategic partners for high-end defence production. A task force was then constituted by the defence ministry under former DRDO chief VK Aatre, which among other things suggested fnalising only one or two partners for each sector.

The Atre Committee recommended designating one private sector firm as the SP for each of seven technology areas — aircraft, helicopters, aero engines, submarines, warships, artillery guns and armoured vehicles. It also recommended selecting two SPs each for three other technology segments — metallic material and alloys, non-metallic materials, and ammunition, including smart munitions.

If the SP model is not approved soon, then the Indian Navy, specially, may look for other means to procure submarines. Vice Admiral DM Deshpande, controller of warship production and acquisition, had recently said the Navy needed the submarines to maintain its force level, and admitted that in case the Strategic Partnership model does not work out, it would mean ‘time penalties’ before a plan B can be worked out.

  1. M
    Murari Chaturvedi
    May 11, 2017 at 6:45 pm
    Future will only tell about the feasibility of SP model and flow of business down to MSMEs. Prima facie,SP model is leading to create one more step back towards redtappism for smaller production units. An SP designated company will behave like thanedaar until certain regulations are put in place to disverse the opportunities to all equal as per their capabilities.
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