New Defence Procurement Policy is Coming Soon: Parrikar

Defence industry is at a threshold new dawn and opportunity Indian MSMEs. Defence Minister, Manohar Parrikar indicated that the New Defence Procurement Policy (DPP) likely to come up very soon but he preferred not to mention any specific deadline for it. However, he added that at this moment as far as the procurement is concerned, there are many issues in defence.

Country’s micro, small and medium enterprises (MSMEs) have been waiting since long for the DPP-2015 to facilitate their entry into the lucrative but highly complex Defence supply sector.

While speaking at an event organised by industry body FISME, Parrikar said, “We are focusing on a fresh DPP with make in India concept well clarified."

“I think it should come in a reasonable time and when I say reasonable time I have not given any deadline simply because deadlines are for me and not for the public,” he added.

The Federation of Indian Micro and Small & Medium Enterprises (FISME) on Thursday organised a seminar on ‘Opportunities for MSMEs in Defence Sector in which Parrikar was the chief guest.

Parrikar stated that one of the very important aspects of security of the nation is self-reliance. “You cannot afford to be dependent on someone else for your weaponry or armament,” he said giving the “simple logic” that one cannot be dependent on import when it comes to eventuality because “for various reasons imports can get into a jam or stuck up”.

“And that is one of the reasons the mind-set of Defence Procurement has to change,” he said.

He promised that the regulatory mechanisms will come in due course that too on fast-track. But even the fast-track requires some time. The time frame can be squeezed but cannot be eliminated,” Defence Minister said.

“I request you all to hold for some time,” he urged.

The Government of India’s Defence Procurement Policy (DPP) 2013, outlines the scope for ‘greater involvement’ of Indian industry in the defence sector. The DPP outlines the order of priorities as ‘Buy’ (Indian), followed by ‘Buy and Make’ (Indian), ‘Make’ (Indian), ‘Buy and Make’ (with Transfer of Technology) and ‘Buy’ (Global).

But despite such directional provisions in the current policy framework, Indian MSMEs continue to face a range of challenges.

The Minister said that as far as the R&D is concerned the IPP technology transfer and all aspects have already been addressed.

“Interaction or a platform for the small industry will be created, the moment the DPP is enforced,” he said.

“At this moment as far as the procurement is concerned, there are many issues in defence. We are focusing on a fresh DPP with make in India concept well clarified,” he said.

Meanwhile, FISME President, Sangam Kurade said that one single biggest impediment for MSMEs has been absence of an empowered interface to deal with host of administrative, technical and policy issues whether with the Ministry or DRDO or any other relevant Defence department.

Investment in the defence sector is expected to cross INR 25000 crore in 7-8 years. Under the 30 per cent offset policy for procurement of defence equipment in excess of INR 300 crores, this provides a significant opportunity for MSMEs to become part of the defence ecosystem.

Former DRDO chief V K Saraswat said that there is an opportunity of USD 150-200 billion for the MSMEs in the defence ecosystem.  The NITI Aayog member stressed that the simplified DPP can make it much easier for the MSMEs to get into the Defence sector and will become a boon for them.