Amit Cowshish is a former Financial Advisor (Acquisition), Ministry of Defence and presently a Distinguished Fellow with the Indian Institute for Defence Studies and Analyses. Click here for Detailed Profile
The Defence Procurement Procedure 2013, as also its earlier versions, does not define an Indian company. Some would argue that the answer is very simple: any entity registered in India under the Companies Act, 2013 or any other relevant statute and operating with a valid license, where such a license is required, qualifies as an Indian company, enterprise, institution or establishment.
India’s quest for modernization of the armed forces is propelled by the persistent threat to its territorial integrity and the aspiration of becoming a great power. However, there is no clearly defined comprehensive policy, much less a carefully crafted strategy, for time-bound modernization of the armed forces and there is no mechanism in place to steer the modernization programme in a holistic manner. In fact, there is considerable ambiguity about the core question as to what constitutes comprehensive ‘modernization’.
While there was perhaps no option for the MoD but to do what it has done, it would be naive to expect the seller to acquiesce in forfeiture of the bank guarantees, recovery of the sums allegedly paid in violation of the PCIP (assuming that it will be possible to recover this amount) and to simply take the three helicopters back without demur.
Shorn of its rhetoric, the only tangible outcome discernible from the joint statement is the agreement on staging two flag meetings at the LoC. In fact, there are some questions that need to be asked, for example, why did the situation worsen to the extent that the DGsMO had to meet to affirm their commitment to maintain the sanctity of, and the ceasefire on, the LOC?
MoD, according to news reports, has instructed the Army HQ that its permission will need to be taken before changing the structure or role of the units in future. This could easily be interpreted to mean that there are no existing instructions on such vital issues. But such an impression would be wrong.
This programme was a sincere effort by the MoD to walk the talk on participation of the private industry in defence manufacturing. The success or failure of this programme will have a long lasting effect on MoD’s efforts to strengthen the defence industrial base in the country.
The avro replacement is not a design and development programme which will involve extensive use of the airfields for test flights. It is an aircraft that is already flying and will be built as per the OEM’s specifications that will go into manufacture of the aircraft in India.
The services will have no option but to reduce the allocation under the heads where the impact is not immediately visible: maintenance of infrastructure, purchase of spares for maintenance of equipment, procurement of ammunition, etc.
Several issues have been raised in the last one year, one such issue concerns the need for amending the policy to enable the MoD to demand offsets in specific area(s) rather than being driven by the vendors.