Defence Primer

Reinvigorating Defence Procurement and Production in India
‘Buy Indian
designed, developed
and manufactured
(IDDM)’ equipment
with 40 per cent
indigenous content
is quite mystifying.
In the absence of
details, it is difficult
to understand how
this will help the
cause of speeding
up procurements or
indigenization.
talk on Make in India if this deadline is missed.
Promoting Make in India in Dfence through
indigenization
It is disconcerting that India meets less than 40 per cent of the requirement
of defence equipment through indigenous sources. Efforts made in the past
have had little impact. Not a single project has taken off under the ‘Make’
procedure which was introduced in 2006 to promote indigenous design and
development of prototypes of high technology complex systems. One of the
decisions taken by the DAC last month is to fine tune the ‘Make’ procedure
but the details given out by MoD are sketchy.
As a matter of fact, another decision taken last month to introduce a new
‘Buy Indian designed, developed and manufactured (IDDM)’ equipment
with 40 per cent indigenous content is quite mystifying. In the absence of
details, it is difficult to understand how this will help the cause of speeding up
procurements or indigenization. Going by what has been made public, there
is a real danger of this ostensible effort to promote indigenization getting
mired in procedural tangles.
This is also true of the recommendation made by the committee that MoD
should adopt ‘strategic partnership’ model to forge long-term relationship with
the private industry to ‘support sustainability and incremental improvements
in the capability of platforms through technology insertions over their
lifetime’. A follow-up committee set up by MoD to recommend the method
for selection of these partners seems to have submitted its report. The idea of
long term partnerships is good and it will certainly promote self-reliance in
defence but the model suggested by the committee seems somewhat shaky as
the choice of the strategic partner for a particular project by MoD may not
always go unchallenged by other competitors.
Considering that the strategic partnership model is meant for Buy and Make
cases in which the foreign vendors are required to transfer technology to
MoD-nominated Indian production agencies as per the terms of the contract,
it would have been easier to adopt a model in which the choice of the Indian
partner is left to the foreign vendors. This is only to suggest that that there
may be alternatives to the recommendations made by the committee. MoD
needs to consider all such alternatives before promulgating the new DPP.
Evolving a strategy
The ultimate objective of reforming the existing systems and procedures
is to ensure expeditious procurement of the approved requirements of the
armed forces in terms of capability sought by them and maximise indigenous
production. At the systemic level, the existing structures and procedures
need to be reformed to ensure that the defence plans (a) comprehensively
encompass the armed forces as well as other organizations and departments,
(b) are based on realistic financial assumptions, and (c) get formulated by an
overarching planning cell within the MoD, under the direct and continuous
supervision of the DAC.
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