In a major step to spur up the “Make in India” effort and to open up big-ticket collaboration with private companies that can offer their expertise in five critically important sectors for defence, the defence ministry is mulling “strategic partnerships” with not one, but two companies for each sub-sector.
The initial idea was to rope in one private strategic partner for each platform.
“The ministry is now looking at a two ‘strategic partner’ situation rather than a single ‘strategic partner’ ,one for each of the five critically important sectors of defence production,” a top source told this newspaper.
The five sub-sectors are armoured fighting vehicles (AFV), aircraft and helicopters, submarines, ammunition and macro process management of issues and for which five sub-groups, respectively, had been formed on the MoD’s orders on May 24, 2016.
Last month, the private companies made their respective presentations to the government.
“Basically the idea is not to place all eggs in one single basket. Besides preventing a monopoly situation, it will also allow for a good price discovery,” said the source, explaining the rationale for such a possible move.
Another objective of such a policy is to fire up the competitive zeal in the defence public sector units (DPSUs). Defence minister Manohar Parrikar has not been too impressed with the track record of DPSUs. Openly critical of the work culture in DPSUs, he had asked them in the recent past to step out of the “cocoon of comfort”.
In many cases, at least two partners are being sought for logistical reasons as the requirements are big as well as with huge market potential.
