The new procedures and Manual 2006 released by defence minister Pranab Mukherjee are expected to cut down delays in armament procurement. For the first time Make procedures to boost indigenous research, development and production facilities was also unveiled.
As a major concession and boost to domestic armament industryboth in private and public sectorsthe new policy has a provision for providing level playing-field for indigenous vendors vis-a-vis foreign players by allowing comparision of cost, insurance and freight (CIF) prices of foreign vendors with indigenous offers by subtracting excise duty, sales tax and local levies.
The new policy also amplifies governments defence offset implementation policy, thereby signalling that international tenders for some of the countrys biggest ever defence deals like the acquisition of 126 multi-role combat aircraft may be in the offing.
Another big deal worth $700 million is in the pipeline, where the army is to sign a purchase agreement of 197 helicopters to replace its ageing fleet of Chetaks and Cheetahs. For this, the US-based Bell Helicopter and European consortium EADS have been short-listed and evaluated.
Responding to queries, Mukherjee said that the Make procedure had been designed to enable Indian industries to develop high technology complex systems and upgrade weapons required by the armed forces.
The new policy provides for sharing of development costs with the two vendors identified following a transparent selection process, he said.
The defence minister also said Make would bridge the critical gap in defence procurment procedures and pave way for increased participation of Indian industry in the defence sector.
About the modified fast procedure, he said a top-down approach would be adopted in which all critical decisions on acquiring weapons platform urgently would be decided in a collegiate manner by the Defence Acquisition Council.
The new policy also lays down that in all the defence contracts worth more than Rs 100 crore it will be mandatory for both the sellers and the buyers to sign a pre-integrity pact to avoid corruption and undue influence to win contracts. It also amplifies the defence offsets in all deals worth more than Rs 300 crore.