Defence Procurement

Some of the provisions in the DOG do not seem to be well thought out, provide greater leeway to the foreign companies, and have a potentially negative potential on eligible manufacturing sector, particularly defence manufacturing.

The Rafale deal is especially important as it is IAF’s best bet to stem and even reverse the recent and continuous fall in the combat aircraft squadrons fielded.

India’s defence forces have to be continually prepared with modernised assets and a well-planned and executed supply-chain network. This calls for a well-evolved logistics infrastructure. To achieve this, a close study of the extant procurement procedure, the process of allocation of the budget, and the lacunae therein, is necessary. This article ponders on the challenges or peculiarities faced during the revenue procurement process for the Indian Army. Defence procurement, unlike procurement or other departments, involves a deliberate and complex procedure.

It has been a long time since the first set of instructions on defence procurement was issued in 1992. Since then, however, there have been several refinements and additions, based on the feedback from the stakeholders and the experience of the Defence Ministry itself, culminating in the Defence Procurement Procedure (DPP) 2011. This is presently under review and it would be reasonable to expect that the changes being contemplated will result in further refinement of the procedure and address some of the concerns expressed from time to time.

Entrusting the final appraisal of financial attributes to the Ministry of Finance may bring about a more open, dispassionate, integrative, and authoritative decision-making system.

In the wake of the selection of the Rafale the offset clause currently in force must be used to revamp India’s domestic aerospace industry, making it more technologically current and capable of taking on advanced design and development tasks in future.

The range, speed, armament carrying capacity and the ability to accurately deliver a variety of weapons against different targets make the current IAF fleet of just over 32 squadrons far more formidable than when the IAF had almost 39.5 squadrons.

The Indian Army is undergoing the process of transformation. This, if realised, would become one among the critical factors that will assist India achieve the ability to secure its national interests. A few issues are worth flagging, even as the process is underway.

An efficient, transparent PPP policy dovetailed with an effective FDI framework will not only ensure that state-of-the-art defence equipment is procured but will also be instrumental in enabling transfer of technology.

In the absence of reforms in several areas, DPP-2011 may not be able to achieve its stated objectives of expeditious procurement and greater involvement of domestic industry in defence production.