Govt clears policy for strategic partnerships in defence

Source: Business Standard, May 24, 2017

New Delhi: The Union Cabinet on Wednesday “took note” of the Defence Ministry’s proposed Strategic Partnership model for encouraging indigenous manufacturing in the field of defence, Union Minister Arun Jaitley said.

Jaitley, who holds both the Finance and Defence portfolios, briefing journalists after a meet of the Union Cabinet said there has been an opinion for a long time that domestic manufacturing in defence should be pushed.

“Cabinet took note of this proposal which deals with encouraging Make in India in relation to defence manufacturing,” Jaitley said.

He said since the government was the only buyer in the field of defence, surety of order is required to build capacity in the private sector in defence manufacturing.

“You don’t set up a manufacturing facility if you are not sure of an order, that is the rationale behind the model,” Jaitley said.

He also said it will “coexist” with capacity building in Defence PSUs.

The Defence Ministry finalised the Strategic Partnership model at a meeting of the Defence Acquisition Council (DAC) on May 20.

The policy envisages the establishment of long-term strategic partnerships with qualified Indian industry majors, wherein the Indian industry partners would tie up with global original equipment manufacturers, to seek technology transfer and manufacturing know-how to set up domestic manufacturing infrastructure and supply chains in defence manufacturing.

Jaitley said four sectors have been finalised for the model at present – fighter aircraft, helicopters, submarines and armoured vehicles.

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