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India May Reconsider Procurement Policies

Feb. 20, 2013 - 05:00PM   |  
By Vivek Raghuvanshi   |   Comments
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NEW DELHI — In the wake of the AgustaWestland corruption scandal, the Indian Ministry of Defence may revisit its policies on weapon purchases and production, Defence Minister A.K. Antony announced.

Without elaborating on how the policies will be reframed, Antony said, “the government is going to have a second look at both the defense procurement procedure and the defense production policy and amend it in a manner so that the industry can take more interest in defense production.”

An MoD official said emphasis will have be laid on domestic weapon production over imports.

Defense analysts here, however, said the government has been saying this (to boost homemade production) for a decade, and yet it still imports a majority of its weapons because the domestic industry is not ready to produce high-tech equipment.

“Low levels of foreign direct investment at only 26 percent in joint ventures and uncertainty about the potential of defense markets for the private companies compared to the state-owned defense companies is the main reason for the slow growth of the Indian defense industry,” said defense analyst Nitin Mehta.

Antony called on the senior functionaries of the defense forces to give extra importance to using homemade products when planning weapon procurement.

“While drawing up the list of products for their operational requirements, the services should look at the availability of the same in the country first. Imports should be the last resort,” said Antony.

The Indian Defence Research and Development Organisation (DRDO) has teamed up with Russia and Israel to develop high-tech weapons, including the BrahMos supersonic cruise missile, which is operational, and the Indo-Israeli medium-range surface-to-air missile, which is under development.

However, several of the homemade projects by DRDO have been delayed by years or even decades, incurring huge cost overruns.

“The Indian defense forces have to meet their weapon needs from overseas purchases and will continue to do so as the Indian defense industry cannot mature unless the government loosens controls over investments and encourages the private sector defense companies compared to the state-owned companies,” added Mehta.

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