Indian MOD to Announce New DPP Soon

By admin • August 31st, 2010

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India Defence Online, New Delhi — India will be getting a new Defence Procurement Policy (DPP) and Defence Production Policy by early September this year. The Defence Production Policy is making its debut in the Indian Defence sector.

The highlights in the procurement policy include focus on crucial technologies, increased research and development and a helpful taxation regime. As for the production policy, it aims to involve public and private firms to produce defence equipment.

The Indian Defence Ministry has been aiming to modernise its public sector undertakings and the Ordnance Factory Board (OFB) and trying to reduce the delays in the procurement of defence equipment. The new procurement and production policies will facilitate these aims and they are currently being reviewed by the Defence Acquisition Council (DAC) and are awaiting clearance.

The Defence Production Policy is being introduced for the first time and its main aim is to increase indigenous capabilities to manufacture the requirement of defence equipment by the Indian Armed Forces. This new Production policy mandates that weaponry and military systems will be identified several years into the future to enable local companies to develop and manufacture them in time. The identified systems will be allocated to specific domestic defence companies as development projects. Sources said that the ministry will lay down clear time targets and provide 80 per cent of the incurred cost.

As for the DPP-2010, it will be an improved version of DPP-2009 and will facilitate greater involvement of the private sector in defence production. The DPP must also ensure that the domestic defence market offers great opportunity for formation of joint ventures and direct sourcing by the global players.

Sources also indicated that under the new policy, local firms will be encouraged to register their technological capabilities in an Indian Defence Ministry databank. Therefore, when need be, the Indian Defence ministry can survey and identify at least two major companies and assign them with the development contracts.

Source: India Defence Online

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