An Indian Army soldier climbs down from a Schilka air defence weapon system during the Aero India air show. (Photographer: Dhiraj Singh/Bloomberg)

India Mulls Partnerships Between Defence PSUs And Foreign Firms

In what could be a major policy amendment, India’s defence ministry is mulling a strategic partnership model where government-run defence companies will be allowed to forge joint ventures with foreign firms.

Sources said the government is seriously considering involving the defence public sector units under the framework of the strategic partnership model. The government had unveiled the strategic partnership model last year in May. Under this model select private firms were to be roped in to build key military platforms like submarines and fighter jets in India in partnership with global defence majors.

There was criticism of the strategic partnership model as it did not specify a clear role for major defence PSUs like Hindustan Aeronautics Ltd. and Mazagon Dock Shipbuilders Ltd. and Bharat Earth Movers Ltd., which are the leading producers of key military platforms in India.

Though the policy was announced in May, nothing concrete has taken place on the ground for its implementation.

When asked about the issue, Additional Secretary of Defence Production Subhash Chandra said the government was committed to create a level-playing field for all the stakeholders.

There are issues relating to our policy on defence manufacturing. We are considering how to involve the DPSUs. We are working on certain issues
Subhash Chandra, Additional Secretary, Defence Production

India is a leading importer of arms and military platforms globally and the current government has been maintaining that indigenisation of defence manufacturing is a priority area.

The new policy was expected to attract billions of dollars of investment in defence manufacturing by private defence majors including leading foreign firms.

The model was proposed by the Dhirendra Singh Committee in July, 2015. It had said that for the ‘Make in India’ initiative to become wider in the defence sector, the government should adopt a strategic partnership model, whereby a private firm is chosen for the development of a specific identified platform.