SP model for long-term partnership

Foreign Original Equipment Manufacturers (OEMs) are now not required to indicate the details of Indian Offset Partners (IOPs) and products at the time of signing of contracts, Rajya Sabha was told on 22 July 2019.

‘Services’ as an avenue of offset have been re-instated, Minister of State for Defence, Shripad Naik, said in a written reply to the Upper House.

These are part of the Offset guidelines that have been made flexible by allowing change of IOPs and offset components, even in signed contracts.

Meanwhile, Government has notified the ‘Strategic Partnership (SP)’ Model for establishment of long-term strategic partnerships with Indian entities.

The SP model will apply through a transparent and competitive process to tie up with global Original Equipment Manufacturers (OEMs) and seek technology transfers to set up domestic manufacturing infrastructure and supply chains.

Additionally, the ‘Make’ Procedure has been simplified with provisions for funding of 90% of development cost by the Government to Indian industry and reserving projects not exceeding development cost of Rs.10 crore (Government funded) and Rs.3 crore (Industry funded) for MSMEs.

Separate procedure for ‘Make-II’ sub-category has been notified wherein a number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry/individual etc., have been introduced.

Till date, 36 proposals for development by industry have been given ‘In-principle’ approval under Make-II.

Giving update, Naik said the Defence Industry sector, which was hitherto reserved for the public sector, was opened up to 100% for Indian private sector participation through licensing.

To date, 442 licenses for manufacturing of defence items have been issued.

The Defence Product List has been progressively rationalised and trimmed and licensing procedure has been further simplified.

The Annual Turnover as reported by companies operating in Defence and Aerospace sectors in the

Private sector has reported approximately Rs.15,000 crores of turnovers in 2018-19 from Defence and Aerospace businesses. Comparatively, the Public Sector reported Rs.63,208 crores turnovers from the same businesses in 2018-19, said the Minister. fiinews.com