(Image source from: Defence Minister nods for major changes in defence procurement})

Major changes in the procurement of Indian defence equipment have got a nod from the Defence Minister Manohar Parrikar. As per the changes, priority would be given to indigenously developed, designed and manufactured defence equipment, said Mr Parrikar.

It is believed that emphasizing on 'Designed in India', will not just help India retain Intellectual Property Rights, but also help in building an "eco- system" for the purpose of
manufacturing defence equipment.

According to rules, at least 40% of Indian components are to be used in the indigenously made defence equipment, so as to continue with PM Narendra Modi's Make in India push. Incase the design is not Indian, 60% of its components must be Indian. The department of defence production intends to encourage research and development in the private sector, by bearing 90% of design and development cost concerning major systems. Small and medium scale industries would be offered funds valued Rs. 3 crore to 10 crore for the design as well as development and contract within two years.

The minister said, "If we cannot give them the contract, then we propose to refund their entire cost. I will try to ensure that at least 30% of our procurement is sourced from them. Defence public sector companies have been instructed to source as much as possible from small and medium industries."

As per the changes rules, Off-set would be applicable for contracts valued more than Rs. 2,000 crore.

According to the minister, the entire focus is encouraging business and enterprise in India, including that of seeking strategic partners for the manufacture of critical equipment like fighter jets. The minister said that, "therefore we didn't think fit to continue with the previous off-set policy," the Defence minister said.

-Sumana