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Focus On Indigenisation

SP’s Aviation

February 2017

In a rare media interaction with SP’s Aviation, Ashok Kumar Gupta, Secretary, Defence Production, outlined his vision for defence manufacturing in India and addressed a wide range of subjects including ‘Make in India’, DPP 2016, defence offsets, role of DPSUs, investment in R&D, delays in procurement decisions, blacklisting and other related issues.

SP’s Aviation (SP’s): The new DPP 2016 is being referred to as game changer for the sector. How do you see it altering the Indian defence growth story?

Secretary: The new Defence Procurement Procedure (DPP) 2016 has come into effect from April 1, 2016. It focuses on achieving the ‘Make in India’ vision by according priority to ‘Buy (Indian–IDDM)’ and ‘Buy (Indian)’ categories. It also mandates increased indigenous content. The ‘Make’ procedure has been simplified with provisions for funding of 90 per cent of development cost by the government to Indian industry and earmarking projects not exceeding development cost of ₹10 crore (government funded) and ₹3 crore (industry funded) for the micro, small and medium enterprises (MSMEs).

This would create an ecosystem in defence manufacturing by harnessing the capabilities of Indian private sector specially MSMEs and inculcate the R&D culture in the sector.

SP’s: In your opinion, what are the new key points of DPP 2016 for a foreign original equipment manufacturer (OEM) looking at Indian market?

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