Amit Cowshish replies: The business practices, professionalism, and potential of the private sector in India for undertaking the design, development and production of sophisticated defence equipment are second to none in the world. If, despite this, India has not become a defence manufacturing hub, it is largely because of the economic and geopolitical milieu of the country, which is vastly different from the one in which the private defence companies bloomed in the US after the Second World War.

Amit Cowshish replies: The standard format of Request for Proposal (RfP) given in the Defence Acquisition Procedure 2020 (DAP 2020) includes the Fall Clause. This clause requires the bidders to submit a written undertaking as a part of the technical offer that they have not supplied, or are not supplying, similar systems or subsystems at a price lower than that offered in the present bid to any other ministry or department of the Government of India.

Amit Cowshish replies: The Defence Acquisition Procedure (DAP) 2020 does not specifically prohibit the use of raw material, hardware, or software imported from any country. However, it does require the vendors to institute appropriate measures for information security and to ensure that the equipment being supplied is free from the possibility of subversion attacks, embedded spyware/ malware, and similar risks.

Amit Cowshish replies: As the first step, the Ministry of Defence (MoD) needs to formulate a composite policy that focuses on the indigenisation of high priority technology areas, shedding the notion that it must necessarily result in savings. The commercial viability of the identified projects and institutional arrangement for financing them, apart from a mechanism to accommodate the cost of failed efforts, must form the bedrock of the policy.

Amit Cowshish replies: Broadly speaking, there are four reasons for the low level of indigenisation in defence products. The primary reason is the absence of a pragmatic overarching policy which, apart from defining the term ‘indigenisation’ which is presently interpreted in different ways, also recognises that indigenisation cannot always result in savings, especially in areas like development of special alloys and critical technologies which do not offer economy of scales.