Indian MoD on Procurement Overdrive

The Indian MoD has cleared acquisition proposals in excess of INR 60000 crore (US $9.98 billion approx.) during the last five months.

Ever since Manohar Parrikar took over as the minister of defence in November last year, he has held three Defence Acquisition Council (DAC) meetings. The DAC is India’s supreme defence procurement decision-making body and the next step after the DAC approval is contract negotiation with the selected vendor.

 Among the major procurement decisions taken by the DAC Mine Clearing Vessels; Airborne Warning and Control aircraft, Basic Trainer Aircrafts, Mounted Artillery Guns and Multi Barrel Rocket Launchers.

The onus of these contracts has been on ‘Make in India’ theme, outlined by Prime Minister Narendra Modi.

Take the case of the Mine Clearing Vessels. Goa Shipyard has been given the mandate for the manufacture of 12 vessels at a cost of INR 32,000 crore (US$5.3 billion). The shipyard has been given the autonomy to choose a foreign manufacturer which will provide the technology.

The most important ‘Make’ category deal has been awarded to HAL for manufacture of HTT-40 turbo-prop Basic Trainer Aircraft at an unstated volume by which the line could fully match economies of scale and profitable.

The Army’s long standing demand for artillery guns have also been accorded the Buy and Make (Indian) category at an estimated cost of INR 15,759 crore (US$2.5 billion). While the primary contractor will be a yet-to-be-chosen Indian corporate, it has been allowed to select its own foreign partner.

A Russian company has been  selected to supply Grad Multi Barrel Rocket Launchers (MBRLs), . Lockheed Martin has been asked to supply a C-130J to replace the one that crashed late last year.The DAC also approved four choppers worth INR 2,324 crore (US$3.8 billion) for survey vessels.