Representational imageNew Delhi: The defense ministry Saturday broadly finalized a much-awaited policy under which select private firms will be roped in to build military platforms like submarines and fighter jets in India in partnership with foreign entities.
Seen as a major initiative, the 'strategic partnership (SP) model' aims to create a vibrant defense manufacturing ecosystem in the country through involvement of both the major Indian corporates as well as the MSME sector.
A meeting of the Defence Acquisition Council (DAC), the top decision making body of the defense ministry, gave the go-ahead to the SP model after deliberating on it for the second time this week.
The finer details of the new model is yet to be finalized.
Initially, the policy is expected to be implemented for manufacturing fighter aircraft, submarines and armored vehicles. It is expected to be expanded to other segments at a later stage.
The policy is likely to be examined by the finance ministry before being considered by the cabinet committee on security.
The defense ministry said the policy envisages establishment of long-term strategic partnerships with Indian defense majors through a transparent and competitive process wherein they would tie up with global OEMs to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.
"The policy will give a boost to the 'Make in India' policy in the defense sector and set Indian industry on the path to acquiring cutting-edge capabilities which will contribute to building of self-reliance in the vital sector," the ministry said.
Referring to sectors identified to implement the policy, it said additional segments may be added in future.
"Appropriate institutional mechanisms will be set in place to implement the policy," the minister said.
Last week, Jaitley had a meeting on the SP model with representatives of defense arms of leading groups including Larsen and Toubro, Ashok Leyland, Mahindra and Mahindra, Reliance Infra, Tata Group, Punj Lloyd, Adani Group and Bharat Forge Ltd.
At that meeting, some industry representatives had favored a level playing field and expanding the industry base by allowing entry of new players.
It was learned that some officials had also raised concern about possible "judicial intervention and federal audit" in case of award of successive orders to one 'strategic partner'.
The SP model was proposed by the Dhirendra Singh Committee in July, 2015. It had said that for the 'Make in India' initiative to become wider in the defense sector, the government should adopt a strategic partnership model, whereby a private firm is chosen for the development of a specific identified platform.
Last year, the then defense minister Manohar Parrikar had announced that the policy on SP model would be unveiled soon.
