PANJIM: Negotiations for procuring Rafale jets for the Indian Air Force will begin by the government to government committee later this month. France’s Dassault Aviation is likely to enter into a joint venture with Hindustan Aviation Limited or any private firm to set up its manufacturing facilities in the country to augment its existing production line, Defence Minister Manohar Parrikar said Monday.
The initiative is a push under the Make in India campaign in defence and modalities of the negotiations will be discussed during French Defence Minister Jean-Yves Le Drian’s visit to India on Wednesday, he said.
“The government to government committee will be set up which will begin negotiations on the deal. The negotiations will start anytime in May and we have to conclude them as early as possible. We have not set any deadline since it is a government-to-government (India and France) procedure,” Parrikar said. He asserted that the committee will complete the negotiations ‘in a time bound fashion’.
“We are working government to government with many countries including the USA, Israel and Russia. We have already worked with France in the past,” Parrikar added.
Last month, the two countries agreed to get into a G-to-G contract for 37 Rafale jets in fly-away condition for delivery considering the critical requirement of the IAF in mind. India will be the second foreign buyer of Rafale after Egypt that has a contract for 24 aircrafts as per an agreement in February this year.
Parrikar also said that in an attempt to carry forward the ‘Make In India’ campaign, the Defence Ministry recently cleared huge procurements at Rs 1.10 lakh crore approximately. The procurements consist of 90 per cent under the popular category launched by the Prime Minister Narendra Modi.
Speaking to media at his office in Patto, Parrikar said the procurements were cleared even as the Defence Procurement Policy (DPP) will be finalized in two to three months.
“Almost Rs 1.10 lakh crore worth acquisitions are cleared, and 90 percent are Make In India,” he said.
“The final DPP may come up before the ministry in June but some chapters would spill over to July. The policy basically consists of exports, Make In India initiative, level playing field for suppliers, policy on agents and black listing policy among 10-12 areas,” Parrikar said, claiming the purchases will depend on the strategic importance of the deal and its type.
The expert committee on DPP, formed under the ministry, will give its report on general procurement within 45 days after studying the policy and suggesting amendments if any. It has also been given the liberty to submit an interim report. “The major aspects will be covered after 10-15 days. You will see a lot of procedures in May and June itself. We have cleared procurements despite ongoing work on DPP,” he added.
Conceding that the current procedures are covered with lacunae and unexplained areas, the defence minister reiterated that the committee is working on different areas to have more transparency and easier modes.
“DPP is going to be the biggest step for the ministry. It has already taken up actions such as allowing 49 percent foreign direct investment in the sector and in some cases even 100 percent. The second step is that most of the procurements are done with majority component with Make In India,” he said.
In another step, the Defence Ministry delisted certain items for exports as in the last six to eight months the export NOCs have been granted online, unlike the earlier practice where getting NOCs would drag for months. The e-service ensures NOCs are granted within a specified time frame.
“The entire idea of DPP is to ensure that the Make In India initiative is a success and also provide a long-term guarantee to suppliers with the country working towards treating nations as partners rather than just suppliers,” he said.
“Today, if someone produces defence gadgets, there is no guarantee that he will get the order for five years at a stretch. Who will develop something and spend energy unless he is clear on what is the amount of business that he would be able to do? If someone develops something he needs a long-term guarantee. Defence Ministry is a unique buyer; there are no export orders for that product. So it is of paramount importance to us that when someone develops something he should be given initial support. This aspect would be considered in DPP,” Parrikar said.
