NEW DELHI — In a sharp departure from its earlier policy to bring in fair and open competition among domestic defence companies, India's Ministry of Defence on Saturday nominated state-owned enterprises to carry out the midlife update of 693 Russian-made BMP-II infantry combat vehicles.

The decision was made by the Defence Acquisition Council, the apex body on defense procurement decisions, which is headed by Defense Minister Arun Jaitely, a senior MoD official said.

"Under the upgrade program, MoD has nominated state enterprises Ordnance Factory Board and Bharat Electronics Ltd. to undertake an upgrade program worth $375 million for BMP-II infantry combat vehicles on a single-vendor basis because [the] Indian Army needs the upgraded vehicles on priority and the two companies have already completed such tasks in past," the MoD official added.

The program is already delayed by seven years, and the Indian Army wants upgraded vehicles within the next two to three years, a senior Army official said. "The BMP-II infantry combat vehicles upgrade at this stage will include replacement of Electro-Optic Fire Control System to boost surveillance capabilities of the vehicles which will be carried south by BEL while the integration will be done by OFB," the official said.

The decision to nominate state-owned enterprises to undertake the [BMP-II] upgrade program is based on Indian Army recommendations because the service wants to kick-start immediately, whereas domestic private industry has sought more time to come up with solutions, the MoD official explained.

In 2014, the Indian Army issued a request of information to private defence companies for comprehensive update of BMP-II infantry combat vehicles wherein Tata Motors, Larsen & Toubro Ltd., Tata Power SED, Mahindra Defence, Kalyani Group, Punj Lloyd Ltd. and Alpha Design Technologies participated, but the case did not move forward, the Indian Army official added.

BMP-II’s upgrade plan for the future also includes upgradation of current power packs from 285 horsepower to 380 horsepower and provision and fitment of third-generation anti-tank guided missiles.

The BMP-II upgrade plan will provide offensive capabilities to perform the critical task of carrying soldiers into the battle zone backed with fire support, the Army official noted.