New Delhi: The defence ministry has relaxed its procurement norms, making it easier for Indian companies, including start-ups, to supply equipment and other products to the armed forces.
Under the so-called Make II category of the Defence Procurement Procedure, (where no government funding is involved in production) industries can now make suo motu proposals to the armed forces, offering to supply products based on their own assessment of requirements. So far the armed forces could seek supplies as per their requirement.
Also start-ups will now be allowed to develop equipment for the Indian Armed Forces, the defence ministry said in a statement on Tuesday.
“There was a draft policy circulated. We had made some observations and almost everything that we asked had been granted," said Jayant Patil, head of defence and whole-time director of Larsen & Toubro Ltd. “I see this as a very positive thing."
Patil said globally, the practice is that where the industry sees the need, it offers to provide products.
“This will help the industry and the armed forces as well," Patil said.
To hand-hold industry and start-ups, the government will now set up project facilitation teams to act as the primary interface between it and industry during the design and development stage. These teams will provide technical inputs, trial infrastructure and other facilities as required by the vendor.
“Even if a single individual or firm offers innovative solutions, Service Headquarters will now have the option to accept and process the vendor’s development initiative. Service Headquarters will be allowed to hire domain experts/consultants from private sector to increase outreach and enhance awareness among the industry," the defence ministry said. “Most importantly, there will be no foreclosure of project after the project is sanctioned, except on default by the vendor, to ensure that the successful vendor has assured orders."
Patil said this could mean the small start-ups may no more need any ratings from agencies like Crisil.
The defence ministry so far had orders to not do business until the business has a certain rating.
“This will help the SMEs (small and medium enterprises)," he said.
The Defence Acquisition Council (DAC) on Tuesday also cleared procurement of assault rifles and carbines worth Rs3,547 crore on “fast track basis" to meet the immediate requirement of troops deployed on the borders, the defence ministry said.
Under the proposal cleared at the meeting chaired by defence minister Nirmala Sitharaman, 72,400 assault rifles and 93,895 carbines will be procured. The procurement is expected to address the shortage of weapons for the armed forces, it added.