Home >politics >policy >Defence ministry unveils new procurement policy

New Delhi: The defence ministry unveiled a new procurement policy on Saturday which will give first priority to Indian public and private sector for major military procurements and also help plug the loopholes the allow bribery.

The defence acquisition council chaired by defence minister A.K. Antony cleared amendments to defence procurement procedures on Saturday with the “objective of infusing greater efficiency in the procurement process and strengthening the defence manufacturing base in the country", the ministry said in a statement.

“The only way forward for the country is rapid indigenization of defence products, with both the public and the private sectors playing pivotal roles in this endeavour," Antony was quoted as saying in the statement.

To enhance transparency and avoid scams such as the one surrounding the AgustaWestland chopper deal, the ministry has approved a proposal under which services headquarters would be required to freeze specifications of the desired products before they are approved by the defence acquisition council (DAC).

AgustaWestland, a division of Italian defence group Finmeccanica, faces allegations in Italy and India that it paid bribes to win a $750 million deal to supply 12 VIP AW101 helicopters to transport Indian political leaders.

The new changes in policy will also end the virtual monopoly of the state owned firms and ordnance factories in the defence sector. Under the changes, they will not be automatically nominated for maintenance and repair of systems procured from abroad as the private firms will be allowed to take part in these contracts.

“Preference for indigenous procurement has now been made a part of DPP through an amendment that provides for a preferred order of categorization, with global cases being a choice of last resort. The first option would be to buy from India followed by ‘buy and make India’," the defence ministry said in the statement.

Under the second category, private and public sector firms can tie up with foreign vendors and produce the equipment required by the armed forces within the country.

The meeting made it mandatory for the armed forces to explain to the ministry of defence why they are not preferring to buy from Indian sources or excluding the higher category, the ministry said.

The other three categories include “Buy and make with Transfer of Technology", “Make", and the last option of buying the equipment from foreign vendors directly under the “Buy (global)" category.

“Approval for all deviations from the defence procurement procedure will henceforth be sought from the defence acquisition council instead of the defence minister," the statement said.

PTI contributed to this story.

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