Strategic Partnership Model in Defence Acquisition

The policy on Strategic Partnerships in Defence sector was approved by Defence Acquisition Council (DAC) in May, 2017. It was promulgated on 31.05.2017 as Chapter-VII of Defence Procurement Procedure (DPP) – 2016 titled as ‘Revitalising Defence Industrial Ecosystem through Strategic Partnerships’. The policy was placed before the Cabinet Committee on Security (CCS). The CCS considered the Note on the Policy in its meeting held on 24.05.2017 and noted the contents thereof. The chapter was uploaded on Ministry of Defence website: https://www.mod.nic.in.

The policy is intended to institutionalise a transparent, objective and functional mechanism to encourage broader participation of the private sector, in addition to DPSUs / OFB, in the manufacture of defence platforms and equipment such as aircraft, submarines, helicopters and armoured vehicles. It will serve to enhance competition, increase efficiencies, facilitate faster and more significant absorption of technology, create a tiered industrial ecosystem, ensure development of a wider skill base and trigger innovation, leading to reduction in dependence on imports and greater self-reliance in meeting national security objectives. The following four segments have been identified for acquisition under Strategic Partnership (SP) route:Fighter Aircraft,Helicopters,Submarines
Armoured Fighting Vehicles (AFVs) / Main Battle Tanks (MBTs).
The Strategic Partnership Model (SPM) is a different category of Capital Acquisition in addition to the existing categories as mentioned in Chapter-I of DPP-2016 i.e. ‘Buy (Indian-IDDM)’; ‘Buy (Indian)’; ‘Buy & Make (Indian)’; ‘Buy & Make’ and ‘Buy (Global)’.

The amount of investment and employment opportunities likely to be created cannot be quantified at this stage as the cases in the respective segments are at their initial / early stages.