Ten Imponderables in the Strategic Partnership Scheme
Why the objective sought to be achieved through the strategic partnership scheme could not be attained by resorting to an existing provision in DPP 2016?
- Amit Cowshish
- June 22, 2017
India spends a significant amount of resources on its national defence. Efficiency in utilisation of resources is not only an economic imperative but vital for defence preparedness. In view of this, the Defence Economics and Industry Centre was created in 2006 to promote research on various economic aspects of India’s defence. Since its inception, the Centre has undertaken a number of policy relevant studies besides constantly engaging vital stakeholders (Ministry of Defence, Armed Forces and Industry) on a range of issues. The major focus areas of the Centre are:
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Why the objective sought to be achieved through the strategic partnership scheme could not be attained by resorting to an existing provision in DPP 2016?
While developing critical defence technologies has undeniable benefits, their acquisition through Transfers of Technology brings numerous complexities and eventually may deliver limited benefits.
The formal inclusion of the Munitions List within the SCOMET framework explicitly brings the defence industry under the purview of India’s global commitment to non-proliferation.
The SP model, if implemented well, is likely to have a number of benefits for both the private sector and the larger Indian defence industry.
There seems to be no clear advantage of giving an overarching role to the Ministry of Home Affairs as regards formulation of policy or grant of industrial licence for manufacture or export of defence items.
The objective of promoting Indian industry can be achieved in a simpler manner if after selecting the platform to be inducted MoD leaves it to the foreign OEM to tie up with the Indian company of its choice.
The new enabling provision in GFR-2017 provides the MoD a chance to amend its own procurement document and include a provision of production reservation and price preference for domestic industry.
It would be both graceful and fair to pay a reasonable amount that is seen as equitable compensation for infringement of the fundamental right to life or damages arising from tortious liability of the government.
While there is no doubt that India could do with help from Japanese defence firms, the modality of acquiring technologies from foreign companies in general requires to be clearly articulated.
Speaking at the United Service Institution on May 4, 2017, the Chief of the Army Staff said that India needs to spend much more on military modernisation to ensure that economic growth continues unhindered.



