New Delhi, Oct 29 (IANS) With an eye to the indigenisation of India’s defence industry, the new defence procurement procedure (DPP) would have a new category of “Buy and Make (Indian)” under transfer of technology.
The DPP-2009 will take effect from Nov 1, 2009.

“A new category named ‘Buy and Make (Indian)’ has been introduced. If a project is selected by the Defence Acquisition Council to be categorised as ‘Buy and Make (Indian)’, Indian firms will play a lead role in negotiating and obtaining technology and co-production arrangements with the foreign manufacturers. As such, the RFP (request for proposal) will be issued to the Indian firms and not to the foreign OEM (original equipment manufacturer),” said a senior defence official.

Under the current procedure, if an item is categorised as ‘Buy and Make’, a production agency is identified by the government for transfer of technology. The negotiations are carried out by the defence ministry with the foreign OEMs.

However, past experience has shown that this has not helped in building up higher technical capabilities as the technology transfer has been essentially transfer of engineering skills for production of some of the non-critical components and the critical items are invariably obtained from the foreign firms.

This method has also not encouraged formation of joint ventures or alliances for co-production with Indian companies.

“Under the DPP-2009, Indian firms identified to have requisite technical and financial capabilities would be required to submit project proposals indicating a detailed road map for development and production of the items over its life cycle.

They will also be required to spell out the proposed production arrangement with the foreign manufacturer along with the content of the transfer of technology. The product so manufactured and supplied by the Indian company must have 50 percent indigenous content,” said the official.

According to the official, the approach under new category would be more akin to ‘Make’ procedure. However, the development and production would not be through indigenous research and development but through transfer of technology from the foreign firm.

“This change in DPP-2008 would enable pro-active participation of Indian industry in manufacturing defence products through co-production arrangements, such as joint ventures, with foreign manufacturers and through transfer of technology,” the official added.