Lok Sabha Question No. 3854 (UNSTARRED), answered on 2017-03-24
Subject: Defence Procurement Policy
Ministry: DEFENCE
Asked by: George Baker

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE PRODUCTION

## LOK  SABHA UNSTARRED QUESTION NO.3854

TO BE ANSWERED ON THE 24 TH  MARCH, 2017

## DEFENCE PROCUREMENT POLICY

3854.  SHRI GEORGE BAKER:

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) the present status of Make  in India programme  with  regard to Defence Procurement Policy 2016; (b) the details of targets fixed and the achievements made so far under the programme since its inception; (c) whether  the  quality  to  raw  materials  used  in  defence  products  is  checked  / investigated  by  the  foreign  country  laboratories  and  if  so,  the  details  thereof  and  the reasons therefor; (d) whether the Government proposes to open laboratories in the country to check / investigate the defence products with an aim to promote Make in India programme; and if  so,  the  details  thereof,  State  /  UT-wise  along  with  the  funds  likely  to  be
- (e) sanctioned for the purpose and the time by which it is likely to be opened?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(DR. SUBHASH BHAMRE)

र  ा रा य मं ी

(डा. सुभाष भामरे)

(a) to (e): A statement is attached.

*******

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA UNSTARRED QUESTION NO. 3854  FOR ANSWER ON 24.3.2017

- (a)    Defence  Procurement Procedure (DPP)-2016, which  has come into effect  from  April  2016,  focuses  on  institutionalising,  streamlining  and simplifying defence procurement procedure to give a boost to 'Make in India'    initiative  of  the  Government  of  India,  by  promoting  indigenous design, development and manufacturing of defence equipment, platforms, systems and sub-systems. The key features of revised DPP, promoting 'Make in India' inter alia include:-
- (i) A new category of procurement 'Buy {Indian-IDDM (Indigenously  Designed,  Developed  and  Manufactured)}'  has been introduced in Defence Procurement Procedure-2016 and the same has been accorded top most priority for procurement of capital equipment.
- (ii) Preference has been accorded to 'Buy (Indian)' and 'Buy and Make  (Indian)'  categories  of  capital  acquisition  over  'Buy (Global)' & 'Buy & Make (Global)' categories.
- (iii) Requirement  of  Indigenous  content  has  been  enhanced  / rationalised for various categories of capital acquisition.
- (iv) The 'Make' Procedure has been simplified with provisions for funding of   90 % of development cost by the government to Indian industry and reserving projects not exceeding development  cost  of  Rs.  10  crore  (government  funded)  and Rs. 3  crore (industry funded) for MSMEs.

……2/-

(b) The  following  achievement  have  been  made  by  the  Government under this programme:(i) Defence  Acquisition  Council  (DAC)  accorded  approval  of  136 capital  procurement  cases at  an  estimated  cost  of  Rs.  4,00,714/crore during the last two financial years (2014-15 and 2015-16) and current year 2016-17 (upto January 2017),  out of which 96 cases involving  Rs.  2,46,417/-  crore  are  under  the  'Buy  (Indian-IDDM)', 'Buy (Indian)', 'Buy & Make (Indian)', 'Make' categories. (ii) 141  contracts  with  total  value  of  Rs.  2,00,010/-  Crore  (approx.) were  signed  during  the  last  two  financial  years  (2014-15  and 2015-16)  and  current  year  2016-17  (upto  December  2016),  out  of which 90 contracts involving a value of Rs. 83,344/- crore (Approx) were signed with Indian vendors. (iii) Capital expenditure of Rs. 1,75,420/- Crore (approx.) was incurred on purchase of defence items for Armed forces during the last two financial  years  (2014-15  and  2015-16)  and  current  year  2016-17 (upto  December  2016),  out  of  which  of  Capital  expenditure  of Rs.  1,05,030/-  Crore  (approx.)  was  incurred  on  purchase  from Indian vendors. (c) to (e): The responsibility of quality assurance of raw material used in defence  products  rests  with  Organizations    such  as  Ordnance  Factory Board  (OFB),  Defence  Public  Sector  Undertakings  (DPSUs),  Directorate General of Quality Assurance (DGQA), etc.  At present, there is no proposal to  open  any  new  lab  in  the  country  to  check  /  investigate  the  defence products. However DGQA, DRDO, OFB, DPSUs and Armed forces already have their own laboratories or test facilities at various locations across the country to check / investigate the defence products. These agencies have offered  some  of their  test  facilities to  private  sector,  details of  which  are available on their respective websites.

*******