New policy to be unveiled to plug loopholes in defence deals

Stung by the recent VVIP chopper scam, the Defence Ministry will unveil a new procurement policy to plug loopholes that allow bribery and encourage indigenous acquisitions.
As part of its efforts, the Ministry is planning to enforce strict provisions to discourage Indian private firms from offering imported products to the armed forces with a 'Made in India' tag and ask them to produce the equipment indigenously.
The new Defence Procurement Procedure (DPP) will be unveiled very soon and the amendments to be made in the policy would be finalised by the Defence Acquisition Council (DAC) meeting to be held tomorrow, Ministry officials said here.

The policy changes would be such that it will plug all the loopholes in the present processes to avoid any scope of bribes to be paid by the vendors, they said.
Under the proposed rules for procurement under the 'Buy and Make India' provisions, the Defence Ministry is relaxing the norms for Indian players for production in joint ventures with foreign players.
However, the provisions for indigenous content in these products are getting tougher as the government will not allow the vendors to import equipment from abroad and offer it to the armed forces with a 'Made in India' tag, sources said.

Under the new plans, the Indian vendors would be allowed to form JVs with foreign companies under which they will have to have 50 per cent indigenous component in overall equipment inventory whereas earlier this percentage was to be maintained throughout the tender completion process.