Monday, 24 January, 2022
HomeDefenceDefence Ministry proposes leasing of military equipment and specialised trial wing

Defence Ministry proposes leasing of military equipment and specialised trial wing

Draft Defence Procurement Procedure, 2020 also proposes increasing the Indigenous Content stipulated in various categories of procurement, to support the ‘Make in India’ initiative.

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New Delhi: India is planning to lease military equipment not used in actual war — transport fleet, trainers and simulators — as part of its revamp of the Defence Procurement Procedure (DPP), the bible of the defence ministry when it comes to acquisition.

Defence Minister Rajnath Singh has unveiled the draft DPP, 2020 which focuses on Make in India and indigenous defence capability enhancement.

Another important idea is the creation of a specialised trial wing that will carry out Field Evaluation Trials of defence equipment.

The objective of trials will be to nurture competition rather than elimination for minor deficiencies.

Higher indigenous content

The draft policy also proposes increasing the Indigenous Content (IC) stipulated in various categories of procurement by about 10 per cent to support the ‘Make in India’ initiative.

A new Category — Buy (Global – Manufacture in India) — has been introduced with a minimum 50 per cent indigenous content on cost basis of total contract value.

Only the minimum necessary will be bought from abroad while the balance quantities will be manufactured in India, a statement by the Ministry of Defence said.

This would be in preference to the ‘Buy Global’ category as manufacturing will happen in India and jobs will be created in the country, it said.


Also read: HAL cuts its profit on Tejas Mark 1A deal by 50%, fighter jets to take to sky by 2022


Leasing of military equipment

Talking about the leasing clause, the proposed DPP 2020 says the new category has been introduced to substitute huge initial capital outlays with periodical rental payments.

Leasing is permitted under two categories — Lease (Indian) where Lessor is an Indian entity and is the owner of the assets and Lease (Global) where Lessor is a Global entity.

This will be used for military equipment not used in actual warfare like transport fleets, trainers, simulators among others.

Sources said rather than spending huge capital budget on procurement of these items, they can be rented which would also entail all spares and service.

The scope and options for Product Support have also been widened to include contemporary concepts like the Performance Based Logistics (PBL), Life Cycle Support Contract (LCSC), Comprehensive Maintenance Contract (CMC) among others to optimise life cycle support for equipment.

The capital acquisition contract would normally also include support for five years beyond the warranty period, under the proposed DPP 2020.

It also lays emphasis on product export under offsets while incentivising offsets for units in defence corridors.


Also read: Rafale production halts in France due to COVID-19, jets’ delivery to India could be delayed


 

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3 COMMENTS

  1. Defense acquisition: “Lend Lease”. The US invented this fr a nearly bankrupt Britain during World War Two. But Britain had been ground down by Germany and Japan, whereas India has been ground down by itself since 1947!. India needs debt like yet another hole in the head.

  2. Manohar had time over runs finalizing the DPP 2016 while the Indo US strategic Defense partnership was at its best. The problem was the enemy within in the form of disgruntled Army Generals who only want bantering of their ego and usurp the civil powers of procurement and contracting . Not all the utter failures of this Army can be attributed to the flawed DPP or the corrupt IAS lobby there are basic flaws elsewhere in the Army establishment . The Army officer lives under myths that he is ultmate boss above AF and the NAVY as subordinated forces and the Army believes that they are the Government in the MoD and the secretary should be subordinate to them and that they know jargon terms better than secretary . THe Army men are attested and under oath to obey the orders of their superiors to the peril of their life and can never never be trusted as balanced rational decision makers and the vendor will always be under a brow beat of the Army buyer if he be ma=de the contracting officer what the Army officer ambition is . Army officer of the IA has been a selfish lot even exploiting the patriot sepoy worst than the Britisher done . They have Booze quota, ration quota and all the luxury of hefy salary . Indian Army officers have still a hang over of being a BRITISH ROYAL ARMY and have a closed mind on the constitutional realities . They Still talk of Madras Bombay and Bengal sappers of the EIC and have a hang over of the Raj . In nut shell Army officer draws his plans after Army exit and looks to the corporate world for after quitting career , Most officers are active baiters on the stock exchanges and have biases in built for certain companies at the very start of the Career . This indigenisation is all a gimmick to grab the civil power and hedge the economy through the Army Corporate and Bureaucrat complex.

  3. Manohar had time over runs finalizing the DPP 2016 while the Indo US strategic Defense partnership was at its best. The problem was the enemy within in the form of disgruntled Army Generals who only want bantering of their ego and usurp the civil powers of procurement and contracting . Not all the utter failures of this Army can be attributed to the flawed DPP or the corrupt IAS lobby there are basic flaws elsewhere in the Army establishment . The Army officer lives under myths that he is ultmate boss above AF and the NAVY as subordinated forces and the Army believes that they are the Government in the MoD and the secretary should be subordinate to them and that they know jargon terms better than secretary . THe Army men are attested and under oath to obey the orders of their superiors to the peril of their life and can never never be trusted as balanced rational decision makers and the vendor will always be under a brow beat of the Army buyer if he be ma=de the contracting officer what the Army officer ambition is . Army officer of the IA has been a selfish lot even exploiting the patriot sepoy worst than the Britisher done . They have Booze quota, ration quota and all the luxury of hefy salary . Indian Army officers have still a hang over of being a BRITISH ROYAL ARMY and have a closed mind on the constitutional realities . They Still talk of Madras Bombay and Bengal sappers of the EIC and have a hang over of the Raj . In nut shell Army officer draws his plans after Army exit and looks to the corporate world for after quitting career , Most officers are active baiters on the stock exchanges and have biases in built for certain companies at the very start of the Career . This indegenisation is all a gimmick to grab the civil power and hedge the economy through the Army Corporate and Bureaucrat complex.

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