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Defence Minister Rajnath Singh approves capital acquisition of more than Rs 2200 crore


NEW DELHI: Defence Acquisition Council (DAC) headed by Defence Minister Rajnath Singh on Monday accorded approval for various arms and equipment worth Rs 2,290 crore.

Approved capital acquisition of various equipment includes those from Domestic Industry as well as Foreign vendors. Under the Buy Indian (IDDM) category, the DAC approved procurement of Static HF Tans-receiver sets and Smart Anti Airfield Weapon (SAAW). The HF radio sets will enable seamless communication for the field units of Army and Air Force and are being procured at an approx. cost of Rs 540 crore. The Smart Anti Airfield Weapon being procured at an approx. cost of Rs 970 crore will add to the fire power of Navy and Airforce.

In addition, to equip the Frontline Troops of the Army, the DAC also accorded approval for procurement of SIG SAUER Assault Rifles at a cost of approx. Rs 780 crore. Indian Army already has procured the same number of Sig Sauer Rifles and has been distributed among the troops deployed in frontline including the eastern Ladakh.

In another move, the Ministry of Defence has decided to forego provision of offsets related to the acquisition of military arms and equipment and it will not be applicable in the three specific categories of Inter Government Agreement (IGA), Government to Government (G2G) deal and single-vendor. The offset was introduced in India in 2005.

Admitting that the policy has not been materialised in bringing critical technologies into the country the official said it resulted into extra costs on contracts.

"No offset has led to a transfer of technology, most have to do with product purchase as has been brought out in a recent Comptroller and Auditor General report," Director General (Acquisition) Apurva Chandra said while interacting with journalists.

Recently, the CAG in its report has said that it has failed to bring in cutting edge technology. In addition, Defence Minister Rajnath Singh unveiled the new Defence Acquisition Procedure (DAP) 2020 here on Monday.

Under the new DAP, the investment clause of 30 per cent of contract value by foreign firms in Indian manufacturing sector has been removed, provided the deal is being processed under the government to government or single vendor case.

However, competitive multi-vendor procurement cases will still have the offsets clause. Among other changes, the armed forces will now be allowed to take a variety of equipment on lease with an aim to cut down acquisition time as well as costs.

The armed forces can lease any equipment like transport aircraft, trainers or simulators. The Offset guidelines have been revised, wherein preference will be given to manufacture of complete defence products over components and various multipliers have been added to give incentives in discharge of Offsets