The defence ministry on Saturday cleared the decks for private sector players to build military equipment such as fighter jets, submarines and armoured vehicles in India.
It finalised the “broad contours” of a policy that would work as a template for cooperation between Indian and foreign firms for military hardware.
The government had released its defence procurement procedure in March 2016 but without a key chapter on the ‘strategic partnership’ model that would govern collaboration between foreign vendors and Indian companies for defence manufacturing.
The ministry held a series of meetings with defence equipment manufacturers and industry associations before finalising the model. The defence acquisition council, headed by defence minister Arun Jaitley, met on Saturday and finalised the policy.
A defence ministry spokesperson said the policy envisaged long-term strategic partnerships between Indian players and global OEMs (original equipment manufacturers) for technology transfer to set up domestic manufacturing infrastructure and supply chains. The platforms covered under the model include helicopters.
“In future, additional segments may be added,” the spokesperson said.
A pool of six defence firms is likely to be formed under the model, allowing them to bid for big-ticket military projects. The firms are L&T, Tata, Mahindra Defence, Reliance Defence, Bharat Forge and Adani Group.
The world’s biggest arms importer, India needs to upgrade its defence infrastructure and manufacturing equipment at home would save precious foreign exchange, cut procurement delays and generate jobs.
The guidelines are expected to provide fresh impetus to talks between India and Western aircraft makers for setting up production lines for single-engine and twin-engine fighter planes in the country. India plans to induct more than 400 fighter planes over the next decade.
The guidelines will also govern a Rs 64,000-crore project to build submarines in the country. Several foreign manufacturers are eyeing tie-ups with domestic shipyards to be part of the one of the costliest projects under the Make in India programme, the Modi government’s ambitious plan to attract foreign investment and step up manufacturing.