Rules Governing Defence Procurement be Made More User Friendly, Say Industry Captains

Aero India 2021

New Delhi: Even as the government’s focus on Atmanirbharta in the defence sector received support from both Army and Industry at a webinar marking 25 years of Army-Industry partnership organised by trade body Confederation of Indian Industry (CII) and Society of Indian Defence Manufacturers (SIDM) but there was a view that “rules governing defence procurement needs to be made more user friendly and flexible and that a waiver clause must be there.”

Delivering the keynote address, Chief of Army Staff (COAS) General MM Naravane said that in the case of defence procurement “there is a lot of work needs to be done,” and the Defence Procurement Procedure (DPP) running into about 450 pages and the recent Defence Acquisition and Procurement Procedure (DAPP) running into about 680 pages, “we have not been able to fast track acquisition.”

Congratulating CII and SIDM for having actively steered this partnership, he said “the private industry today is providing us major defence platforms, including artillery guns, bridges, radars and a wide range of weapons, ammunition & equipment. The Indian Army on its part has established the Army Design Bureau which has been proactively reaching out to the industry to effectively harness the potential of the industry towards defence indigenisation.”

“Indigenous defence industry is a big enabler for self-reliance and capability building and is a prerequisite for maintaining our strategic influence and freedom of action,” the Army Chief stated.

He brought out that 75 per cent of our Priority-1 Projects in the 13th Army Plan, costing over Rs 1,50,000 Cr are marked for Make in India programmes.

General Naravane said that the Procurement Procedures can have more flexibility in its operations and interpretations to enable faster procurement of equipment. He said the capital and revenue routes of procurement have aligned under the Deputy Chief of Army Staff (Capability Development and Sustenance). “Combining these routes will result in optimal capability building and will act as a single point of contact with the Industry,” he added.

He felt that it was of “strategic necessity that there is more self reliance in defence,” since in many instances at the strategic and tactical levels we are dependent on foreign equipment.

The Army Chief said the Army Design Bureau (ADB) has been playing a key role in bringing about major structural changes in the Army and engaged the industry in potential areas.

Dr G Satheesh Reddy, Secretary, Department of Defence R&D and Chairman, DRDO, highlighted how DRDO is actively pursuing funding of the development of technology up to 90 per cent of an eligible company’s value which is indigenously manufacturing the spare parts and sub-parts to reduce the imports and meet the needs of the armed forces. He said DRDO has given funding of up to Rs 10 Crore to 25 Indian firms in the past year. He dwelt on how DRDO is supporting the Industry through a number of schemes and is ready to support MSMEs and youth venturing into the defence production.

“Industry has come a long way transforming itself from just component manufacturers to a stage where they have developed systems independently and built a system in which they have become partners,” Dr Reddy observed.

In his opening remarks, Jayant D Patil, President, SIDM focussed on the journey towards ‘Atmanirbharta’ in the strategic defence sector, where the Indian Army has extended great support and has guided the industry through its outreach programmes to familiarise the industry with its requirements, with the compendium of its problem statements and several ‘technology challenge’ rounds to spot the ‘innovators.’

Chandrajit Banerjee, Director General, CII in his address elucidated how CII, in collaboration with the leading private defence industries of the country, has incubated the Society of Indian Defence Manufacturers – SIDM in 2017 to give greater impetus to indigenous defence production.

Baba N Kalyani, Chairman, CII Manufacturing Council and Founder President, SIDM, dwelt on the entrepreneurial spirits of the industry and mentioned how the industry has proven itself to be a major contributor to nation-building by indigenous production of Artillery Systems, Communication Systems, Shipbuilding, Armoured Vehicles, Missile Systems, UAV and Drone Technologies.

SP Shukla, Vice President, SIDM, in his concluding remarks highlighted the various initiatives for creating an enabling environment for the growth of the industry by the Government.

To mark the occasion, an MoU between the Indian Army and SIDM was inked to provide further impetus to indigenisation under the ‘Atmanirbhar Bharat’ and to achieve strategic independence by reducing dependence on foreign origin equipment. This MoU was signed on the occasion of 25 Years of Army-Industry Partnership with Confederation of Indian Industry (CII). Collaboration between the Indian Army and industry started in 1995 with the indigenisation of spares and has progressed to major defence platforms and a wide range of weapons and equipment.

Increasing security challenges due to India’s rising stature in the international community, apart from unresolved borders and revisionist adversaries require continuous and concerted capability building of the Army through modernisation to address them. This can be done by equipping the Army with indigenously built equipment.

In order to optimise capability building and single contact with the industry, Indian Army has reorganised itself by aligning both the revenue and capital routes of procurement under Deputy Chief of Army Staff (Capability Development & Sustenance). Army Design Bureau (ADB) has been established to act as a direct facilitator with the industry and thereby connect the defence manufacturers directly with the user. These changes have resulted in a collaborative engagement between the technology provider, the equipment manufacturer and the user.

The Government has made necessary policy changes to support indigenisation and achieving self-reliance in defence sector with the active support from the Army. Industry associations have provided a common platform for industry to interact with Indian Army to showcase their expertise. The inputs of industry go a long way in effecting policy modulation and changes. With the signing of MoU with SIDM, Indian Army has reiterated its firm resolve towards achieving self-reliance by supporting and handholding indigenous defence industry.

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