The Ministry of Defence (MoD) is in talks with RITES and SBI Caps to act as consultants in the selection process of strategic partners to build combat planes, helicopters and submarines.

The strategic partnership policy aims to boost the Make in India initiative by encouraging private sector companies to take part in defence production and create jobs.

The Ministry of Defence (MoD) is in talks with RITES and SBI Caps to act as consultants in the selection process of strategic partners to build combat planes, helicopters and submarines.

“In line with the government of India’s commitment, third party consultants will bring transparency to the selection process for strategic partners under the strategic partnership model that has been mired in delays, threatening the viability of Prime Minister Narendra Modi’s Make in India initiative,” sources told FE.

The strategic partnership policy aims to boost the Make in India initiative by encouraging private sector companies to take part in defence production and create jobs.

Under the proposed policy initiated during the tenure of former defence minister Manohar Parrikar, a number of issues, including process of selection of Indian partner, shortlisting of OEMs, contractual obligations of OEMS for the life cycle of the project, etc, were left open.

Fixing these issues will take time as each of the programmes considered will entail big investment and is expected to run for 30-40 years.

As reported by FE earlier, four sectors – fighter aircraft, helicopters, submarines and armoured fighting vehicles and main battle tanks – have been finalised for the model.

The SP policy was to be part of the amended defence procurement procedure – 2016 (DPP), but has not been finalised yet.

According to industry sources, “The SP model is expected to empower the MSME sector through progressive indigenisation of defence manufacturing. An estimate shows that defence projects worth more than $35 billion hinge on the strategic partners policy, which has potential to transform MSMEs with trickle down of orders and technology transfer.”

The Atre Committee recommended designating one private sector firm as the SP for each of seven technology areas — aircraft, helicopters, Aero engines, submarines, warships, artillery guns, and armoured vehicles. It also recommended selecting two SPs each for three other technology segments — metallic material and alloys, non-metallic materials, and ammunition.