Column Rationalising defence procurement

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: offset obligations have not been fulfilled under the revised procurement procedures. The banked offset credits would be non-transferrable except between the main contractor and his subcontractor within the same acquisition programme.

Another important revision is the waiver of mandatory industrial licensing requirements of production for private companies for the defence sector and to be entitled to offset programmes agreed with foreign OEMs.

In the revised procedure, focus has also been towards strengthening the procurement framework by making it more transparent, speedy, impartial and accountable. The advance information on issue of request for information and request for proposals in procurement cases giving vendors a lead time to prepare is a welcome step.

However, there appears to be no policy shift in the DPP 2008 to increase the current FDI cap of 26% in the defence sector, a major deterrent for foreign players to enter into joint ventures with Indian private sector companies and in procurement of cutting-edge defence technologies. Overall, DPP 2008 is a welcome move by the GoI to come out with the revised procurement policy taking into consideration the learning and experience over the past two years. It has also laid out certain lucid measures towards increasing private sector participation and indigenisation in the Indian defence industry.