Defence ministry proposes foreign collaboration for arms manufacture

INDIA HAS AN OFFSET CLAUSE FOR DEFENCE PURCHASES THAT REQUIRE FOREIGN FIRMS TO INVEST A PORTION OF THE DEAL IN THE COUNTRY

NEW DELHI: The defence ministry has come out with a proposal for manufacturing top-of-the line fighters, warships and battle systems under the Make in India programme by facilitating collaboration between Indian and foreign arms manufacturers.

The proposed “strategic partners” policy, which is awaiting approval, would invite long-term tie-ups and complete technology transfer, sources in the ministry said.

“India will offer its private sector defence majors for tie-up with global defence manufacturers and allow them to manufacture in India provided full transfer of technology including source codes is agreed to,” a source in the ministry said.

The proposal goes beyond the “screwdriver technology” wherein foreign firms outsource few components to their Indian partners without sharing the technology.

India has an offset clause for defence purchases that require foreign firms to invest a portion of the deal in the country.

The ministry would identify Indian players in the private sector and put them in touch with foreign defence majors for making equipment in India for its military as well as exports.

Once two sides agree to a joint venture, the ministry would sign a long-term agreement with them, assuring dedicated orders and first right of refusal on upgrades.

This would ensure complete technology transfer and longterm commitment of the foreign firm to manufacture in India, sources said.

With the world’s military powers moving to armed pilotless drones on air, land and sea, India could invite foreign entities to make front-line fighters in the country, with domestic player contributing in equal share on manpower and resources, sources said.

While the US has offered codevelopment of vertical takeoff helicopters, India is keen on acquiring long-range and high-altitude armed drones for guarding its disputed borders with China and Pakistan and its 7,000km coastline.