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Private players get go-ahead to build defence aircraft
Govt clears military procurement proposals worth Rs 21,000 crore
Ajay Banerjee
Tribune News Service

New Delhi, July 19
The Ministry of Defence today altered the mode of purchase of equipment for the Indian armed forces by allowing local private sector companies to produce military aircraft in collaboration with foreign collaborators.

Defence Minister Arun Jaitley took the decision as he chaired his first Defence Acquisition Council (DAC) meeting. This breaks the monopoly of lackadaisical Defence Public Sector Undertakings (DPSUs) that have so far been selected for big-ticket defence purchases.

The Hindustan Aeronautics Limited (HAL), a DPSU, currently has the capacity to produce military planes in the country.

The government further cleared procurement proposals worth over Rs 21,000 crore, including five supply ships for the Indian Navy, 32 advanced light helicopters for the Coast Guard, specialised search and rescue equipment for the three services — the IAF, Army and Navy.

Jaitley’s predecessor AK Antony had in November 2010 threatened DPSUs against a similar action but never acted on it. “From now on, there will be no handholding and no nominations… They will have to compete with the Indian private sector,” Antony had then said.

Jaitely today did exactly what Antony had warned of and opened up the defence manufacturing sector to private companies.

Jaitley had recently opened up the defence sector by allowing 49 per cent foreign direct investment.

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