Defence Production

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 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.

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.

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.

On 5 February 2017, a version of the Hawk Advanced Jet Trainer (AJT) was unveiled. The aptly-named “Advanced Hawk” is a joint-venture between BAE Systems and Hindustan Aeronautics Limited (HAL). It has been developed using internal funds on an equal risk basis and offers significant enhancement of the capabilities of the basic Hawk AJT.

The objective of asking these question should be to elicit information that generates a well-informed debate on, and facilitates the result-oriented monitoring of, the MoD’s handling of matters related to the defence budget.

Introduction of the ‘Buy (Indian-IDDM)’ procurement category, the revamped ‘Make’ procedure, structural change in AAP, and higher and flexible indigenous content requirement in certain procurement categories are all likely to deepen the involvement of domestic industry in defence production.

It is time the MoD considered creating structures and organizations that are not an intrinsic part of the ministerial set up to implement the production and procurement policies once these are formulated by the ministry.

There has been much speculation since 2011 about who is going to manage the proposed fund, how is it to be different from the already existing technology related heads in the defence budget, and how will the amount set aside for the purpose be utilized.