Navy’s long-pending hunt to acquire 111 armed, twin-engine utility choppers at a cost of over Rs 21,000 crore will be the first project to kick off under the SP model. DAC also accorded initial approval to the Rs 800 crore acquisition of eight fast-patrol vessels for the Coast Guard to strengthen maritime security

by Rajat Pandit

NEW DELHI: The defence ministry (MoD) on Monday finally approved the implementation guidelines for the “strategic partnership (SP)” model, which aims to boost the Indian private sector’s role in production of advanced weapon systems in tie-ups with foreign armament majors, over a year after the much-touted SP policy was finalised and promulgated.

The Navy’s long-pending hunt to acquire 111 armed, twin-engine utility choppers at a cost of over Rs 21,000 crore, which will replace the ageing fleet of single-engine Chetak helicopters that operate from warship decks, will be the first project to kick off under the SP model.

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Towards this end, the defence acquisitions council, chaired by minister Nirmala Sitharaman, also approved “platform-specific guidelines” for the naval utility helicopters. Separately, the DAC also accorded initial approval to the Rs 800 crore acquisition of eight fast-patrol vessels for the Coast Guard to strengthen maritime security.

The delay in operationalizing the SP policy, which was promulgated in May 2017 and keeps the door open for defence PSUs and Ordnance Factory Board to tie-up with foreign original equipment manufacturers (OEMs), has led to several already long-delayed military modernisation projects being kept in suspended animation till now.

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No major defence project under the “Make in India” framework has taken off the ground in the last four years despite a flurry of announcements and policies. At least six major mega projects worth Rs 3.5 lakh crore, from fighters and submarines to helicopters and infantry combat vehicles, remain stuck at different stages, as was first reported by TOI in October last year. 

A prominent example is the Rs 70,0000 crore programme called `Project-75 India’ to build six advanced stealth submarines, with land-attack cruise missiles and air-independent propulsion for greater underwater endurance, which was initially approved by the MoD way back in November 2007.

The MoD has initially identified four segments – fighters, helicopters, submarines and armoured vehicles like tanks – for execution under the SP route in the joint ventures between Indian and foreign firms. Another important project under the SP route is the IAF’s quest to acquire 114 fighter jets, of which 85% are to be built in India, at an estimated cost of Rs 1.25 lakh crore.

India, of course, remains in strategically-vulnerable and embarrassing position of being the world’s largest arms importer. After the DAC meeting on Monday, officials said the SP model aims to “revitalise the country’s defence industrial ecosystem” and progressively build indigenous capabilities in the private sector to design, develop and manufacture complex weapons for the future needs of the armed forces.

The “amplifying guidelines” lay emphasis on “incentivisation of transfer of niche technology” and higher indigenous content. “Global majors, who in collaboration with Indian partners, are ready to make India a regional/global manufacturing hub will also be incentivised,” said an official.

The SP policy lays down detailed guidelines for the selection of Indian companies as “strategic partners” in a “fair and transparent” manner and based upon the “broad parameters of financial strength, technical capability and capacity/infrastructure”.

In a separate but parallel process, the foreign OEMs will be selected primarily on the basis of the "range, depth and scope" of the transfer of technology (ToT) they offer. The armament majors will not only have to undertake extensive ToT, but also provide formal assurances from their governments that they will get the necessary licenses to do so if selected.