Defence Minister Arun Jaitley on Thursday held consultations with representatives of Chambers of Commerce and Industry (CII) on the proposed Strategic Partnership (SP) model meant to promote the private sector in defence manufacturing.
“The proposed strategic partner model is intended to enhance competition, increase efficiencies, facilitate faster and more significant absorption of technology, create a tiered industrial ecosystem, ensure development of a wider skill base, trigger innovation and enable participation in global value chains as well as promote exports,” the Defence Ministry said in statement after the consultations.
Under the model, the government intends to boost private sector participation and create domestic expertise in four key areas, namely, fighter aircraft, helicopters, submarines, and armoured vehicles and main battle tanks.
Technology transfer
One company would be selected for each area based on its competence, which would then tie up with the foreign Original Equipment Manufacturer selected through the procurement process, to build the platform in India with significant technology transfer. At the deliberations, industry representatives presented their suggestions. “The Ministry has taken due note of these proposals, which would be considered while finalising the policy in this regard,” the statement added.
The fine points would be discussed in a Defence Acquisition Council (DAC) meeting scheduled for early next week. Officials expressed confidence that the policy can be finalised in the next couple of months.
Army apprehensive
The Armed Forces are apprehensive over the overall model as they feel the SP model will block new technology and new players coming to the defence sector. On the other hand, existing defence players argue for committed orders for the next 30 years to give them the economies of scale as defence involves large investments.
