Article Posted on : - Feb 23, 2016

BENGALURU (PTI): The Defence Procurement Procedure 2016, which is expected to be promulgated soon, aims at making India self-reliant in defence equipment, a senior defence official said here on Tuesday.

"The Make in India initiative by government of India is envisaged to develop skills and reduce dependency on foreign OEMs (original equipment manufacturers) in various areas of manufacturing, including electronic systems.

"A step in this direction is the much-expected promulgation of Defence Procurement Procedure (DPP) 2016," Chief of Integrated Defence Staff to the Chairman Chiefs of Staff Committee P P Reddy said.

Reddy said DPP-16 is likely to be issued soon with "path-breaking and game-changing" reforms, focusing on indigenisation, Make in India, growth of MSMEs, skill development, job creation and technology adoption.

"Above all, it aims to cut down the process and time required to realise state-of-art defence equipment," he added.

Reddy was speaking at the inaugural function of Fourth International Conference on Electronic Warfare-2016 here, organised by Association of Old Crows (AOC), India Chapter.

He said monetary probity, accountability and transparency remain priority in DPP, with emphasis on trust. Even blacklisting had been addressed to avoid losing operational capability for the defence forces, he said.

DPP tries to address concerns of services, the primary users, R&D organisations, manufacturers and suppliers. It deals with transfer of critical technology, high-tech manufacturing, employment generation, skilling and export promotion, he said.

Observing that defence procurements cannot be equated with standard open market commercial procurements, he said at times national interest would be the overriding criteria in choice of military equipment.

He said DPP incorporates innovative provisions and added there is a new 'Make' category, a precursor to achieve self-reliance in design, development and manufacturing of defence systems.

This category classifies development as government funded and industry funded.

In the former, government will bear 90 per cent of R&D cost; if industry decides to do it by themselves and if the equipment is successful and inducted in to the service, they will be fully refunded for R&D.

'Make' also has a clause allowing refunding of the entire R&D investment if after successful development, a RFP (Request for Proposal) or an order is not placed within 24 months. This provides industry with unprecedented safety net, he added.

Transfer of technology has been included in 'Buy', 'Make' and 'global' categories in DPP, he said, adding it would help partner with foreign OEMs to develop and design equipment in India.

He said priority is being given to Make in India and the government-funded private R&D. "We hope to achieve self-reliance through this in the defence equipment, especially in electronic warfare systems," he added.