India To Increase Indigenous Content Threshold For Defense Manufacturers

India’s latest Defense Procurement Procedure (DPP) will lay more emphasis on homegrown proposals with increase in indigenous content threshold for ‘buy Indian’ and ‘buy and make Indian’ categories.

According to Indian Express News Daily, the committee formed by Defense Minister Manohar Parrikar to revise the DPP is laying emphasis on promoting “Make In India” in the defense sector. The committee has suggested a model where along with the lowest or L-1 bid, the government should also consider the I-1 bid while selecting a buyer. The I-1 bid refers to the most Indigenous proposal, i.e., with the highest content of a defense product being made in India.

The committee has recommended increasing indigenous content threshold for “buy Indian” and “buy & make Indian” categories to 40 per cent and 60 per cent.

The committee is likely to hand over the final report and recommendations to the MoD on Thursday. An interim report was submitted last week.

The initial mandate of 45 days of the 10-member committee, headed by Dhirendra Singh, former Home Secretary and Special Secretary (Defense), was subsequently extended to July 31.

The committee is also likely to recommend realistic framing of ‘Qualitative Requirements (QR) by the defense services. The QR for any item should have two parts; essential and desirable according to the committee.

The equipment would need to meet the essential requirements and must match as many desirable ones it can. This would prevent the situation like that of the recent cancellation of the tender for a rifle for the army because a weapon matching the Army’s QR does not exist anywhere.