India Readies Policy To Select Private Firms For Defense Production Orders

India’s defence ministry has prepared its roadmap for the selection of private sector companies for military production orders, with a procedure spelt out in a new policy.

The ministry will unveil the elaborate procedure in a new policy soon, the Economic Times reported Thursday.

The defence ministry’s new strategic policy (SP) model will create a pool of six Indian companies that will be accorded special status.

After the pool is created, the companies will be provided with the opportunity to bid for mega defence production orders, expected to be worth over $20 billion.

The defence ministry has come up with a list of criteria that the private sector must fulfil. During the first stage, six Indian companies will qualify to bid for four upcoming projects - submarines for the navy, a single-engine fighter for the air force, helicopters and armoured vehicles for the army.  The companies must have a minimum turnover of Rs 4,000 crore for the past three years.

The selection of Indian companies would also be based on financial capacity, technical ability and current infrastructure. The choice will be in a parallel process on technical and commercial grounds.

Foreign partners will be taking part in four identified projects. This selection will be based on technical evaluations and field trials. Once the foreign vendors are shortlisted, the Indian pool will be invited to plan collaborations and present joint proposals that will be the basis of a final selection.

Only one Indian company can participate in only one strategic partnership project. "The defence ministry will shortly invite companies for the qualification process. The companies will be asked to give their priority preference for the four projects. A total of six companies will be selected based on financial parameters and capability," a senior official told.