One area where the 2015-16 defence budget is likely to hurt the most is in capital acquisition, which has already been under acute pressure in recent years due to the overwhelming share of the ‘committed liabilities’ arising out of contracts already signed

While the exact nature of the understanding between the two countries is yet to be announced and in fact may never be officially released, it is possible to offer an outline of the possible “memorandum” with possible understandings on all the three liability issues as well as the administrative arrangements.

India is already in de facto observance of the spirit of the CTBT by maintaining its unilateral moratorium on nuclear explosive testing. Given that additional nuclear tests may not be needed, it could well reconsider its current position on signing the treaty.

This Brief analyses industry demands and reviews existing regulations in IT and defence procurement markets, culminating with suggestions on a possible way forward for reforms that can avoid adverse implications of industry demands, particularly in view of their potential conflict with important policies fostering indigenisation.