Government made changes to the defence procurement procedures to boost Make in India. In this Department of defence production will fund private R&D.
1. Mandatory 40% domestic content for a domestic design or a mandatory local content of 60% if design is not Indian.
2.Change in the Offset policy, the bar is raised from 300cr to 2000cr.
3. A new category indigenously designed, developed and manufactured category.
Which of the statements given above are correct?
Government made changes to the defence procurement procedures to boost Make in India. In this Department of defence production will fund private R&D.
1. Mandatory 40% domestic content for a domestic design or a mandatory local content of 60% if design is not Indian.
2.Change in the Offset policy, the bar is raised from 300cr to 2000cr.
3. A new category indigenously designed, developed and manufactured category.
Which of the statements given above are correct?
The correct option is A 1, 2 and 3
Government made changes to the defence procurement procedures to boost Make in India. In the bidding process, additional weightage is given to the performance rather than relying only on lowest bidder.
The two major highlights of the new DPP
1. The creation of a new category called the “IDDM” or indigenously designed, developed and manufactured platforms, and the raising of the value of contracts for 30 per cent offsets from Rs 300 crore to Rs 2,000 crore.
2.The IDDM category will get top priority while buying equipment and will be the first to be chosen for tenders. This is likely to incentivize indigenous design and production of defence equipment under Make in India.
3. The reimbursement of development funding up to 90 per cent of the cost, this will further encourage Indian private companies to do research and development. The issue of 30 per cent offsets, which are to be spent in India, by all foreign suppliers, has been a major grouse among Western suppliers. By raising the value of contracts for offsets to Rs 2,000 crore, the defence ministry has satisfied the foreign companies in all future contracts.
Good-intentioned, with a clear focus on the indigenisation of defence production, the test of the new DPP will be in its early finalisation and notification — and eventually, its execution.
Additional information
A crucial chapter, pertaining to selection of strategic partners in defence manufacturing, has not been finalised yet — the V.K. Aatre Committee, formed to recommend policy on this aspect, is expected to submit its report this week.
In finalising the current DPP, the defence ministry has accepted 90 per cent of the recommendations made by the expert committee headed by the former home secretary, Dhirendra Singh.
1, 2 and 3
Government made changes to the defence procurement procedures to boost Make in India. In the bidding process, additional weightage is given to the performance rather than relying only on lowest bidder.
The two major highlights of the new DPP
1. The creation of a new category called the “IDDM” or indigenously designed, developed and manufactured platforms, and the raising of the value of contracts for 30 per cent offsets from Rs 300 crore to Rs 2,000 crore.
2.The IDDM category will get top priority while buying equipment and will be the first to be chosen for tenders. This is likely to incentivize indigenous design and production of defence equipment under Make in India.
3. The reimbursement of development funding up to 90 per cent of the cost, this will further encourage Indian private companies to do research and development. The issue of 30 per cent offsets, which are to be spent in India, by all foreign suppliers, has been a major grouse among Western suppliers. By raising the value of contracts for offsets to Rs 2,000 crore, the defence ministry has satisfied the foreign companies in all future contracts.
Good-intentioned, with a clear focus on the indigenisation of defence production, the test of the new DPP will be in its early finalisation and notification — and eventually, its execution.
Additional information
A crucial chapter, pertaining to selection of strategic partners in defence manufacturing, has not been finalised yet — the V.K. Aatre Committee, formed to recommend policy on this aspect, is expected to submit its report this week.
In finalising the current DPP, the defence ministry has accepted 90 per cent of the recommendations made by the expert committee headed by the former home secretary, Dhirendra Singh.
