Defence Procurement in India: In a major boost to domestic defence companies, India’s apex decision making body for the defence procurement, the Defence Acquisition Council (DAC), Tuesday accorded Acceptance of Necessity (AoN) for capital acquisition for Indian military worth $1.1 billion (INR 8,357 crore).
The defence ministry said all of these proposals have been approved under ‘Buy (Indian IDDM)’ category with focus on indigenous design and development and manufacturing in India which would give impetus to Prime Minister Narendra Modi’s flagship scheme a self-reliant India in defence sector.
Acceptance of Necessity accorded by the DAC under the chairmanship of Indian Defence Minister Rajnath Singh includes procurement of Night Sight (Image Intensifier), Light Vehicles GS 4X4, Air Defence Fire Control Radar (Light) and GSAT 7B Satellite.
“Acquisition of these equipment and systems will enhance operational preparedness of Armed Forces by providing better visibility, enhanced mobility, improved communication and increased capability of detecting enemy aircraft,” the defence ministry said.
$50 million order for MSMEs, Startups
The defence ministry said that the Defence Acquisition Council also accorded consolidated Acceptance of Necessity for procurements of defence equipments worth $50 million (INR 380.43 crore) from the iDEX startups and MSMEs to foster innovation in the country.
Self-reliant India in defence
The ministry said that in order to accelerate the pace of indigenisation, achieve self-reliance in defence and to facilitate Ease of Doing Business for the defence industry, the DAC has incorporated several policy initiatives in the DAP-2020.
It means that all modernisation requirements of Indian military will indigenously sourced and import to be resorted to only as an exception.
Second, in order to reduce the financial burden on defence industry, requirement of IPBG is to be dispensed with and Earnest Money Deposit (EMD) to be introduced as bid security and PCIP cover up to the contract stage.
Earnest Money Deposit will be applicable only for proposals of $13 million (INR 100 crore) and above and MSMEs and startups will be exempted from depositing the EMD.
Vendors whose products are successfully trial evaluated will be provided a certificate to that effect.
iDEX and Make II procedures have been simplified to compress the timelines and for ensuring early placement of contracts on successful iDEX and Make II vendors.