Capital procurement of defence equipment is undertaken from various domestic as well as foreign vendors, based on operational requirements of the Armed Forces, the availability or capacity to produce the equipment in India and abroad in order to keep the Armed Forces in a state of readiness to meet the entire spectrum of security challenges.
During last three financial years (2016-17 to 2018-19), 149 capital acquisition contracts have been concluded, out of which 58 contracts worth about Rs 1,38,727.16 crore and 91 contracts worth about Rs 76,955.73 crore have been placed on foreign vendors and Indian vendors respectively for procurement of defence equipment for the Indian Armed Forces.
Government is pursuing initiatives to achieve higher levels of indigenisation and self-reliance in the defence sector by harnessing the capabilities of the public and private sector industries in the country.
These measures include according priority and preference to procurement from Indian vendors and liberalization of the licensing regime. Defence Procurement Procedure (DPP) accords the highest priority to Buy Indian (Indigenously Designed, Developed and Manufactured) (IDDM).
The ‘Make’ procedure has been simplified with provision for earmarking projects not exceeding development cost of Rs. 10 crores (Government funded) and Rs. 3 crores (Industry funded) for Micro, Small and Medium Enterprises (MSMEs); and with provisions for involving private industry as production agencies and technology transfer partners.
Government has also promulgated the policy on Strategic Partnership in the Defence Sector to encourage broader participation of the private sector in manufacture of major defence platforms and equipment.
This information was given by Raksha Rajya Mantri Shri Shripad Naik in a written reply to Shri Ram Nath Thakur in Rajya Sabha today.