Defence Electronics Policy To Propose Transfer Some Electronics Manufacture From DPSUs To Indian Private Sector

A proposed defense electronics policy seeks to transfer some of the semiconductor and systems manufacturing by public sector undertakings to the Indian private sector.

The policy is being prepared by the Indian Electronics and Semi -conductor Association (IESA) and the National Association of Software and Services Companies (NASSCOM) under direction of the MoD. Sources told defenseworld.net that a decision to have a policy had been taken in December 2014 with a 6-8 months time-frame for preparation.

The sources said that out of India's total defense budget, about 70000 crore (US$115 million) is for electronics and a lot of the core electronics are sourced from abroad. If the whole or a part of this manufacture was transferred to the private sector in India, it would develop intellectual property in high end semi-conductor manufacture, expand the vendor base and reduce prices.

The policy is likely to propose that the defense public sector undertakings (DPSUs) must become integrators of large defense electronics projects by sourcing components from local companies, rather than make the whole system themselves.