Policy to allow private investment in defence finalised by govt

The Defence Acquisition Council (DAC) on Saturday finalised the broad contours of a much-awaited policy under which select private firms will be roped in to build military platforms like submarines and fighter jets in India in partnership with foreign entities.

Seen as a major initiative, the 'strategic partnership model' aims to create a vibrant defence manufacturing ecosystem in the country through involvement of both the major Indian corporates as well as the MSME sector.

The DAC, chaired by Defence Minister Arun Jaitley, held in-depth deliberations on the new policy for the second time this week and decided to give a go-ahead to it.

Initially, the policy is expected to be implemented for manufacturing fighter aircraft, submarines and armoured vehicles. It



is expected to be expanded to other segments at a later stage.

The policy is likely to be examined by the finance ministry before being considered by the Cabinet Committee on Security.

"Breaking new ground, the DAC under the chairmanship of Defence Minister, Arun Jaitley, today finalised the broad contours of a policy aimed at engaging the Indian private sector in the manufacture of high-tech defence equipment in India," the defence ministry said in a statement.

It said the policy envisages establishment of long-term strategic partnerships with Indian defence majors through a transparent and competitive process wherein they would tie up with global OEMs to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.