Saturday, 13 April 2013

Defence ministry's initiative to push indigenous development: DPP-2013 coming soon!

By Ajai Shukla
Business Standard, 13th March 13

The Defence Procurement Procedure of 2013 (DPP-2013), which the defence ministry (MoD) has almost finalized, aims to fundamentally transform the approach to buying new military equipment. From mid-2013, when DPP-2013 is expected to take effect, the international arms bazaar will no longer be the first choice for buying weaponry and equipment. Instead, it will first have to be established that the required equipment cannot be built in India.

A senior MoD official who is involved in framing DPP-2013 tells Business Standard, “So far the army, navy and air force have gotten away with the presumption that sophisticated weaponry must necessarily be bought overseas. Now development in India will be the default option. Only after establishing that indigenous development is impossible will we explore the international market.”

Lip service has long been paid to indigenization but DPP-2013 will back Indian vendors with institutional procedures. After deciding to buy a particular piece of equipment, a process called “categorization” determines whether it will be bought from Indian or from international vendors.

If the equipment can easily be built in India, or must be because it is so sensitive that no overseas vendor will part with it (e.g. electronic warfare equipment), the procurement is classified “Make (Indian)”. Alternatively, if an Indian company can partner a foreign vendor to build an existing system in India with at least 50% indigenous content, it is classified “Buy & Make (Indian)”. Next, if in-service equipment is to be bought overseas and then license-built in India with transfer of technology (ToT), the procurement is categorized “Buy & Make”. Finally, if neither indigenous design nor manufacture is feasible, and the equipment must be bought over-the-shelf, the procurement is categorized as “Buy (Global)”.

MoD and DRDO officials complain that the military often cites “urgent operational requirement” to rush through multi-billion dollar arms purchases in the “Buy (Global),” or “Buy & Make” categories. The military has repeatedly argued that the urgency of a threat left no time for Indian developers like the Defence R&D Organization (DRDO), or Indian public and private sector companies, to go through the time-consuming process of developing a complex weapons system. This argument was made convincing by the decades that the DRDO took to develop its first generation of successes like the Dhruv helicopter, the Arjun tank and the Light Combat Aircraft.

“When the DPP-2013 comes into effect, ‘Make’ and ‘Buy & Make (Indian)’ will be the default categories. If they are, for some reason impossible, the second priority will be ‘Buy and Make’. The ‘Buy Global’ category will be the last option,” says Dr VK Saraswat, the DRDO chief.

MoD officials admit that this indigenization drive can succeed only if Indian industry is allowed the time to develop futuristic weaponry. Last year, the military’s Long Term Integrated Perspective Plan (LTIPP) detailed the armed forces’ equipment requirement for the 15 years out to 2027. Translating these projections into actual development projects will give Indian industry the lead-time to design and develop the weaponry that has been projected.

Until recently, a declassified version of the LTIPP was proposed to be put up on the MoD website, so that Indian industry could begin technology development programmes. But this raised security concerns; and so no declassified LTIPP will be posted. Instead, Requests for Information (RFIs) will be sent out to Indian vendors and consortiums, effectively inviting them to develop selected equipment.

The RFI will detail the performance parameters of the equipment that is required. So far these parameters were listed in a formal document termed the General Staff Qualitative Requirement (or GSQR). The RFI will effectively be an abbreviated GSQR.

“If the military wants to buy weaponry abroad, it will be required to explain at the categorization stage why it cannot be made in India. It will have to demonstrate that the equipment was conceived of well in time, and that industry was given enough time to develop the equipment.  Only if that was done, and industry still failed to develop the equipment, will a category other than ‘Make’ be considered, says the MoD official.

“Along with the LTIPP, the DPP-2013 will give domestic developers the time needed for developing defence equipment. We need to specify what we want to indigenize. Once the industry knows that, market forces will drive investment, development activity, collaboration, joint ventures and help this country to design and develop systems,” says Dr Saraswat.

It is evident that this new indigenization push has been accelerated by the succession of procurement scandals in the MoD, most recently that of the AgustaWestland VVIP helicopters. At a DRDO conference in New Delhi on Mar 23, defence minister AK Antony make a strong pitch for indigenization.


Abhinav said...

I think a very good, though late ,initiative by MoD to kick start indigenous weapon manufacturing in real manner.

One more thing can be done.Instead of Armed Forces/MoD approaching each public or private company individually one by one for RfP, it can be left on companies to approach MoD to know about latest or future requirements of Armed Forces.Or both should go on simultaneously.

Onus would now be on Generals to envisage their requirements of future much ahead of 'crucial time'.They tend to play 'restless' about acquisitions and 'dismissive' about DPSUs so that buying from foreign vendors open 'earning' avenues for them.

This initiative will also open doors for private defence industries of India on equal footing vis a vis DPSUs.

Anonymous said...

Well this sounds good. Honestly I haven't gone through your full article. But hear this from an old hand involved in actual private sector defence production-

If there is a feeling that simply keeping foreign vendors out is a magic pill that will end corruption and provide a fillip to local industry, that is not correct. The real aspects that need to be addressed are a cocktail of the following issues-

Unfreezing the scare to making decisions. Empowering our people to take decisions. Bringing in a regime of "Trust but Verify", rather than the current tender rules of "L1 winner takes all", "no single tenders"...etc. Perhaps there should be continuous weightage points for Quality and Reliability, rather than the current system of you are either technically qualified or not.

So long as you don't remove the above shackles, you will keep extending the Jalebi Arms of our DPP. Bottomline- our learned MOD babus are no pundits who can solve all ills. If it was so, we wouldnt be in the state we are in today. So what has changed today?? Nothing. That means, the solution in the new DPP wont be path-breaking enough to achieve the goals we are looking at.

B M said...

this guy is a loser. don't expect anything from him. we from kerala speak from experience

Anonymous said...

Whatever policy is drafted, I am damn sure that nothing will change. If seriously some strict measure is taken, the groups which r depended on cut money will book a tatkal ticket for the saint to heaven. Just 1 example, after going for 5-6 years for the search of ATGM, when finally the israeli spike is selected it gets cancelled & the reason being single vendor situation. Ultimately the situation will arise when our country gets attacked, no one will take up guns in their arms to defend the country.

Anonymous said...

@BM You don't represent all of kerala. Antony was a good chief minister who had rescued kerala from bankruptcy created by the previous left government. I still remember the days where Air India refused to fly ministers because of the dues to be paid to them by government. He had taken very many steps that had contributed to the development of the state. As this topic is about DPP, i am not going to its details.

Anonymous said...

Anon @ 1553 is correct. corruption will not be weeded out just because you chose to keep the foreign defence firm out. And who suffers in the Bargain? Military of course. In the 66 years that the country has been independent, the DRDO has pretty little to show for the so called " strides" it has made in military hardware. Save the missiles, it has yet to produce a functional piece of military hardware conceived and developed entirely on its own. Heck, even the so called indigenous rifle is an attempt at copying the better features of the proven assault rifles around the world and amalgamating them in one package. They failed , miserably I might add, in that too. Even a third world country like Nepal doesn't want to have to do anything with them. Army is already frustrated having to put up with this weapon.

So the solution lies partly in encouraging the industry to develop military hardware, and partly stop DRDO and the super inefficient Ordnance factories from scuttling whatever chances the military has of getting cutting edge weapons/systems by jumping into the fray each time promising to build a system cheaper when the forces project a demand for one. The DRDO has to accept that it just doesn't have the technological knowhow/expertise to compete in the hugely competitive international arms market. First they need to get their basics right and develop the requisite expertise and knowledge base and then dream of proving cutting edge military solutions to the embattled military that is trying to keep pace in the fajavascript:Recaptcha.reload()st changing modern battlefield.

Anonymous said...

amazing : all it means is that now the forces will not get anything at all. The idea that the forces are actively seeking to buy from abroad is bull. The forces need capability, not words. If the tejas met its specifications on time, it would be in service 10 years ago. Ditto for all blessed projects of drdo and our super efficient, much maligned DPSUs.
Lets face it, there is zero indigenisation in the true sense. DRDO is desperately trying to integrate foreign tech onto our platforms, and in most cases failing miserably. If you dispute this, RTI the number of trips made by DRDO scientists abroad. If Saraswat is so hot , why does he need to be out of the country 200 plus days a year? Regarding DPSUs, the less said the better. Even though they are handed licensed manufacture technology on a platter, they anage to screw it up royally with shoddy manufacture and non existent quality control.
The most ironic part is, I am likely to be savaged as a desh-drohi by the mindlessly jingoistic, while they are blind to the complete looting of the nation taking place in the name of indigenisation.
Solution is NOT to keep buying from abroad. Solution is to make DRDO / PSUs accountable. If that cannot be done, then for heavens sake allow the army / navy / AF to do their job with the best damn equipment that money can buy. After all, those men and women are willing to put their lives on the line for you and me, not just sit and spout the same old cliched rhetoric.

Mr. RA said...

The increasing financial hardships only are now thrusting the new indigenization. Even if that is the main reason behind it, I wish it all to be a success because overall it will be ultimately in the national interest.

Anonymous said...

about time this happened. look at both US and China - in the begining they both had equipment which were sub-standard e.g the M-16 rufles introduced during the Vietnam war and well, almost all the items which China made or makes. But, they stuck to their indigenous production instead of getting it from some oher country. And now, US is a leader in weapons tchnology and the Chinese are fast developing a reputation for excellent equipment like the J-10 etc.

Anonymous said...

Wowee !! I hope these nameless bureaucrats will be there when the armoured divion flounders near Lahore ...but we shall be very happy and as we go to heaven we will know that we have done our duty to our nation by dying a L1 & indigenous death !! These MFs are on grass....we want something that works not patriotic bs from a impotent dhotiwallah!

Yogi said...

The military can justify import option at categorization stage, only if it has power to predict future, which can only come if it has it's own R&D Establishment who may be called Battle Laboratories fully integrated with and under command of operational commanders.

sanket said...

lets see if are able to implement it. if they implement atleast 50% it will be a major boost to India's indigenous defence development.

Yogi said...

January 8, 2010 the Cabinet Committee on Security met to discuss two acquisitions of MoD. The one cleared was for purchase of 12 Helicopters at a cost of 3800 Crores from Italian firm called Augusta-Westland. The one rejected as MoF was unable to find funds was for Air-to-Air Refuellers for IAF. This is the reality of Defence Acquisitions in India, whatever be the policy!

Rahul said...

More than often its the simple attitude than a brilliant plan that makes success happen!

I am astonished to come to know that our people were serious about putting LTIPP on open portal. When ideally all three services shall have instead opened R&D branches within their intelligence for foreseeing future requirements for developing advance and counter-advance systems, followed by their development with selected partners from industry.

An integrated body like ROSOBORONEXPORT shall be helpful in managing things better.

Navy for one has quite of things in place but nothing of such can be said about rest two.

pooja negi said...

this guy is a loser. don't expect anything from him. we from kerala speak from experience

SachinWRT said...

We have all made reports and presentations in college and work place. I know very well that conclusions can be made to tilt if I want it to. My question is who are the people making the arguments in favour and against the proposals? Are they fool proof?

In my dept, Im the head and I take the final decision. It doesn't matter if 10 other people say YES to a proposal. If Im not satisfied, I say NO. I don't care if these 10 people hate me afterwards but they will HAVE TO respect my decision.

Where is such a head guy in MoD? Is he in the loop(technical) to perform his duty? I know antony is a political guy so he cannot be that man. So who is?

Everyone needs to figure out once and for all that our defence needs are so massive that we cannot go on continuing to buy from foreign vendors without serious strategic and domestic concerns. Indigenization is the only way we can sustain.

Ajai, thanks for putting your weight behind indigenization. You must continue the focus and put more articles from this space.

Anonymous said...

no uniformed officers... will want a cash cow... replaced by... a zero cash cow...

Anonymous said...

The thought process really appears nice. However, I am not aware of any Strategic Thinking Organisation in Govt for such a great step (long term impact). I am sure if put in place even now, a lot of future plans can be made fruitful. India plans for procurement of more then $100B Defence Equipment without any foolproof policy to get the right technology to move for future indigenous manufacture.
India is controlled by Beaurocracy. Many times we as a country endup loosing tremendously because of incompetency of Beaurocracy and smartness of Foreign Companies. Due to this, we may not be able to reap the benefits expected from Offsets. Pl remember, once an equipment is procured, next procurement may happen only after 20 yrs. I hope atleast now we act as a nation.

hiremath said...

Wow what a masterstroke. They ate the malai till now. When the fact of being thrown out of power has dawn upon them they are about to change the rules of the game.