Covid relief to defence industry: India extends delivery deadlines for domestic defence companies


Defence News India: In a big relief for Indian defence manufacturers, the ministry of defence Friday allowed domestic defence companies four more months to complete the delivery of weapon systems and services, while also clarifying that the request for the extension of delivery schedule by foreign defence companies will be considered on case-by-case basis.

The acquisition wing of the defence ministry Friday (June 12, 2020) issued the order following approvals from the defence minister Rajnath Singh.

“Force Majeure shall be applicable for a period of four months, from March 25, 2020 to July 24, 2020,” said the defence ministry.

The order provides for exclusion of the four-month force Majeure period while calculating the delay in the delivery of contracted equipment and services and imposition of Liquidated Damages charges.

“This measure would bring a big relief to the domestic defence industry, whose production schedules have been adversely affected by COVID-19 situation,” the MoD added.

The ministry of defence also clarified that no separate contract specific amendments were required to be made to give effect to this decision.

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“The Indian vendor is free to deliver the contracted items well within the extended delivery period,” the ministry added.

Defence Ministry to consider extension request of global defence companies

Though the existing order is only applicable to Indian defence companies, both defence PSUs and private defence companies, defence ministry said it was open to consider any extension request from foreign defence suppliers that may be facing difficulties due to the outbreak of Covid-19 global pandemic.

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The novel Coronavirus (SARS-CoV-2) has killed more than 4,24,000 people worldwide and infected more than 76,00,000 people and brought down the industrial and business activity to a grinding halt.

The outbreak of Covid-19 pandemic also disrupted the supply chains and assembly lines for foreign defence companies.

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“The foreign vendors can approach the MoD which may consider cases on the basis of the situation prevailing in their respective countries,” the order said.

A large number of India’s major defence contracts are executed by global defence manufacturers like Dassault Aviation of France and the US defence and aerospace majors like Lockheed Martin and Boeing Defense, and Israeli defence companies like Rafael among others.

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Recently French ambassador to India, Emmanuel Lenain, assured Indian authorities that despite Covid-19 outbreak, France will complete the supply of 36 Rafale fighter jets to India on time.

India was set to receive first four Rafale combat jets from Dassault Aviation in May this year, however, the delivery of these 4 jets have been delayed due to the adverse impact of Covid-19 in France.

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