New defence purchase policy unveiled

New Delhi: In a move to cut down delays in armament procurement, the Government on Wednesday unveiled new weapons procurement procedures reintroducing the fast track process in modified form and making field trials of weapons systems more transparent.

The new Defence Procurement procedures and Manual-2006 released by the Defence Minister Pranab Mukherjee for the first time also announced a new 'make' procedure to boost indigenous research development and production facilities.

In a major concession and boost to the domestic armament industry - both private and public sector - the new policy has a provision for providing level playing field for indigenous vendors vis-à-vis foreign players by allowing comparison of CIF prices of foreign vendors with indigenous offers by subtracting excise duty, sales tax and local levies.

Through the new policy, the Government has also made amplification of the defence offset implementation policy thereby signaling that international tenders for some of the country's biggest ever defence deals like the acquisition of 126 multi-role combat aircraft may be in the offing.

The request for proposals for the 126 combat aircraft are likely to be issued next month and industry sources say it could be the biggest ever deal by India, running up to or more than $ 15 billion.

However, that is not the only mega defence deal that is coming up. In another big-ticket deal worth more than $ 700 million, the Army is to sign an agreement for purchase of 197 helicopters to replace its ageing fleet of Chetaks and Cheetahs.

Two firms, Bell Helicopter of the US and European consortium, European Aeronautic Defence and Space Company (EADS), the maker of Euro-Copter, have been shortlisted and evaluated.

Another major deal would be for the purchase of new 155MM guns upgraded to .52 calibre. India is opting to buy 400 of these upgraded guns whose induction is almost 12 years behind schedule.

The Army has already conducted three test trials and an unprecedented fourth one is currently on between the Swedish Bofors guns and Israeli Soltam guns.

Apparently stung by criticism over the delay in evaluation, the Government has said all field trials of equipment would be made more transparent.

"These trials would be conducted on no cost, no commitment basis and equipment of all the vendors would trial evaluated together in field conditions," Mukherjee told newsmen after the release of the new policy.