The much-awaited and long-delayed Strategic Partnership (SP) policy, intended to promote Indian private sector participation in defence manufacturing, formally came into effect on Wednesday. The Defence Ministry notified the policy as the final chapter under the Defence Procurement Procedure.
“The SP model is being implemented to enable participation of private Indian firms in ‘Make in India’ in defence. The SP is expected to play the role of a system integrator by building an extensive ecosystem comprising development partners, specialised vendors and suppliers…,” says the policy that was uploaded on the Defence Ministry website.
Various selection and evaluation criteria have been stipulated for short-listing the SP.
The policy acknowledges that the Indian private sector currently has “limited experience in defence manufacturing and even lesser in respect of final integration” of complex defence systems and sub-systems.
In view of this, the policy states, “besides any experience in defence manufacturing, potential SPs will be identified primarily based on their experience and competence in integration of multi-disciplinary functional system of systems, engineering and manufacturing.”
In a bid to avoid cancellation of deals in case of a single vendor situation, the policy states that “even if only one Original Equipment Manufacturer (OEM) submits a proposal in any given segment, the process of technical evaluation will be completed”.
Speaking on the next steps in the procurement process, now that the policy was in place, the Chief of the Naval Staff, Sunil Lanba, said both the projects were top priority for the Navy.
“As per the model, we all have to get the Acceptance of Necessity (AoN) on what we want to get the Strategic Partners build, so that the SP in each segment can be identified. We are hopeful that we will be able to move the process within six months,” he said.
Of the four segments under SP, two are for the Navy: submarines and utility helicopters. The others are single-engine fighter aircraft for the Indian Air Force and armoured vehicles for the Army.
Both the Navy deals have been held up from some time due to delay in finalising the SP policy.