Wednesday, July 18, 2018

Indo-US Delegation Meeting on Defence Cooperation

Indo-US Delegation Meeting on Defence Cooperation


As part of Indo-US Bilateral Defence Cooperation, the 7th Defence Technology and Trade Initiative (DTTI) meeting was held between India and the US delegation here today. The meeting was co-chaired by, Secretary (Defence Production), Dr Ajay Kumar and Under Secretary of Defence for Acquisition and Sustainment, DoD, US Government Ms Ellen M Lord. The meetings are held twice a year, alternately in India and the USA with the aim to bring sustained leadership focus to the bilateral defence trade relationship and create opportunities for co-production and co-development of defence equipment.

Speaking on the occasion, Dr Ajay Kumar brought out that Indian government has taken a number of steps to give an impetus to Indian defence industry and its flagship ‘Make in India’ initiative.  He said, given the large defence outlay planned for India’s defence requirements in the future, the contribution of our defence industry, in partnership with foreign OEMs to begin with, is expected to be significant. This would also contribute to overall growth of the economy and will also have several opportunity benefits and downstream effects.

Ms Ellen Lord brought out that India-US defence cooperation is one of the core pillars of the defence relationship between the two countries and is continuing apace. She said the US has designated India as a ‘Major Defence Partner’ and expected the defence relationship between the two countries to be further strengthened. She also stated that DTTI is an important forum leading to the 2+2 dialogue between the two countries.

A number of Joint Working Groups have been established under DTTI to progress mutually agreed projects for the benefit of the Armed Forces. Discussions on the formulation of a Standard Operating Procedure and the Industrial Security Annex to take forward projects under DTTI are proceeding as planned.

The joint working group under the Air Force handling the surveillance platform has made considerable progress.  The Indian Navy joint working group is constructively engaged with US Navy for aircraft carrier technology cooperation for the ongoing program.  On the land systems front and on projects under the DRDO, both sides have identified projects where scope of co-production/co-development of systems exists.

The DTTI meeting has great significance for defence cooperation in trade and technology.

Ministry Of Defence Questions In Parliament 

1. Heavy firing by Pakistan

In the event of persistent cross border firing/ceasefire violations along LoC/ IB by Pakistan, the people residing in the affected areas have to leave their homes temporarily. The affected families are shifted to safer places. They are provided all kinds of basic amenities like water, electricity, medical aid, etc. at the designated safe shelters.

Government has sanctioned construction of 14,460 bunkers, to mitigate the hardships being faced by people living on IB/LoC, due to cross border firing. Further, ex-gratia cash relief of Rs.5 lakh is given to next of kin (NoK) in case of death or to the victim of more than 50% disability. Compensation for housing damages/losses, crop losses, livestock losses, relief for stay at relief camps and displacement etc. to those affected by cross border firings are also given as per National Disaster Response Fund (NDRF) norms of assistance, fixed from time to time. Compensation of Rs.50,000/- per loss of milch animal is also given.

This was stated by the Minister of State for Home Affairs, Shri Hansraj Gangaram Ahir in a written reply to question in the Rajya Sabha today.

2. Privatisation of Defence Production

The Government is promoting privatisation in Defence Production.Till June 2018, Department of Industrial Policy & Promotion (DIPP) has issued 379 licenses to 230 Indian Companies for manufacture of various licensable defence items.  Apart from this, one manufacturing license has also been issued by Ministry of Home Affairs for Small Arms and ammunitions.  Till June 2018, 70 license companies covering 114 licenses have reported commencement of production.

The Government has partially withdrawn the public investments in respect of Defence Public Sector Undertakings (DPSUs), Bharat Electronics Limited (BEL), BEML Limited, Bharat Dynamics Limited (BDL), Mishra Dhatu Nigam Limited (MIDHANI) and Hindustan Aeronautics Limited (HAL).  The government shareholding now in above DPSUs is 66.09%, 54.03%, 87.75%, 74% and 89.97% respectively.

As per extant Foreign Direct Investment (FDI) policy, in defence sector, foreign investment upto 49% is permitted under automatic route.  Foreign investment beyond 49% (upto 100%) is permitted through government approval in cases resulting in access to modern technology in the country or for other reasons to be recorded.  FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.  Further, foreign investment in defence sector is subject to other conditions of extant FDI Policy as amended from time to time.

So far, 41 FDI proposals / Joint Ventures have been approved for manufacturing of various defence equipment both in public and private sectors, FDI amounting to US $ 5.13 million has been received in the Defence Industry Sector from April 2000 to March 2018.

This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Dr. P.K. Bijuin Lok Sabha today.

3. Delay in According Approval

A letter was received from an Hon’ble MP (LS) in October 2017 with a request to expedite the proposal under ‘Make in India’ program, Public – Private Partnership program [DCD Grand Power & Grand Power – Ordnance Factory Board (OFB)] for co-production of latest technology small arms.

Another letter was received in March 2018 from the same Hon’ble M.P. stating that even after the due process, the Department of Defence Production (DDP) has sent back the proposal to OFB citing incorrect procedure followed and also lack of Standard Operating Procedure (SOP) with OFB.  The reply, clarifying the status of the case, was sent to the Hon’ble M.P. in May 2018, based on the grounds enumerated below:

The proposal for signing of Memorandum of Understanding (MoU) was forwarded by OFB to the DDP in March 2017.  The MoU was returned to OFB in July 2017 as it was found deficient in terms of procedure followed.  Earlier in September 2016, OFB had been asked to formulate a Standard Operating Procedures (SOP) for selection of the technology partners.  In October 2017, OFB stated that the criterion adopted for the selection of      prospective partner has been clearly defined in the Expression of Interest (EoI) issued by them.  Pending approval of the Standard Operating Procedures (SOP) for the selection of technological partner, the proposal for MoU between M/s Grand Power and OFB was returned to OFB in January 2018 intimating that the same would be progressed based on the approved Standard Operating Procedures (SOP) for the selection of technological partner.  The revised Standard Operating Procedures (SOP) for the selection of technological partner, incorporating the suggestions of the Ministry, was submitted by the OFB in February 2018 which after examination was approved by the Ministry in March 2018.

Now, because of the change in scenario of the requirement of the small arms, Rifle Factory Ishapore, Kolkata is engaged in the development of small arms weapons to meet the requirement of Indian Army and Ministry of Home Affairs (MHA) units.  The available resources of Rifle Factory, Ishapore are being used for the development and production of Small arms weapons for the Services and the MHA.  The need for technology partner for coproduction of NPB weapons is not felt in view of the changed circumstances.

This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Shri P.R. Sundaram and others in Lok Sabha today.

4. General Financial Rules

The General Financial Rules (GFRs) lay down the general rules applicable to Ministries / Departments, and detailed instructions relating to procurement of goods are issued by the procuring departments broadly in conformity with the general rules, while maintaining flexibility to deal with varied situations.

The Defence Procurement Procedure-2016 has been accordingly formulated keeping in view the unique features of supplier constraints, technological complexity and the emergent nature of procurements to maintain operational preparedness of the Armed Forces.

This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Dr. Ratna De (Nag) and Shri Naranbhai Kachhadiya in Lok Sabha today.

5. Vacant Land.

All open spaces/defence lands are utilized/earmarked for defence purposes.  Construction of Key Location Plan (KLP), modernization of Central Ordnance Depot and Armed Forces Medical Service Department has been planned on said vacant land.

Information on buildings built around defence land in Mallad Complex is not held by the Ministry of Defence.

The Government has issued guidelines for issue of no objection certificate by Local Military Authority in respect of any construction coming up in the vicinity of defence establishments.  In case of establishments notified under the Works of Defence Act, 1903, construction is not permitted within notified safety / security zone.

Some representations/requests have been received against the guidelines dated 21.10.2016. Army Headquarters has also raised certain concerns from a security perspective.

This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Shri Gopal Shetty in Lok Sabha today.

6. Contracts under Make IN India

Capital procurement of defence equipment is carried out as per the extant Defence Procurement Procedure (DPP). DPP-2016 focuses on institutionalizing, streamlining and simplifying defence procurement procedure to give a boost to the ‘Make in India’ initiative of the Government of India, by promoting indigenous design, development and manufacturing of defence equipment, platforms, systems and sub-systems.  Ministry of Defence is committed to the objectives of DPP-2016 and is taking all steps necessary to realize these objectives.

During the last three years and current year (upto June, 2018) out of total 168 contracts, 106 contracts have been signed with Indian vendors for procurement of defence equipment for Armed Forces such as Helicopters, Radar, Ballistic Helmets, Artillery Guns, Simulators, Missiles, Bullet Proof Jackets, Electronic Fuzes, and ammunition.

Government has also promulgated the policy of Strategic Partnership in the Defence Sector which encourages participation of the private sector in manufacture of major defence platforms and equipment in four selected segments viz. Submarines, Fighter Aircraft, Helicopters and Armoured Fighting vehicles / Tanks.

This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Shri Kaushalendra Kumar and Shri P.P. Chauhan in Lok Sabha today.

7. Recruitment procedure of private companies.

There is no ban on employment of retired bureaucrats, service personnel, kith and kin of bureaucrats and armed forces in private sector companies operating in Defence sector.

As per the existing rules, if a pensioner, who, immediately before his retirement, was member of Central Service Group ‘A’ wishes to accept any commercial employment before the expiry of one year from the date of retirement shall require to obtain the prior sanction of Government.  While granting permission in such cases, the Government take into regard the factors such as No Objection from Cadre Controlling Authority, whether the officer has been privy to sensitive or strategic information in the last three years of his service, conflict of interest between the policies of the office he has held and the interest of the organisation he proposes to join, any other relevant facts.
The Defence services officers of the rank of Colonel or equivalent and above, who retire with pension, gratuity or any other benefits in respect of the services rendered by them are also required to obtain prior permission of the Government for accepting any commercial employment within a period of one year from the date of retirement.

Before granting permission in such cases, the Government satisfies itself that:

·        The duties of the retired officers in the proposed commercial employment will not be such as to bring him into conflict with the Government;
·        There is no basis for suspecting that such employment has been offered to the officer for any favour which he might have shown, while in services, to the prospective employer;
·        That any official information, knowledge or contacts which the officer might gained by virtue of his official position while in service cannot be used to give the prospective employer any kind of unfair advantage.


Further, with regard to the safeguards which are considered essential and the need for rationalising the existing provisions, the following criteria isfollowed while considering requests of Ex-Service officers for post-retirement commercial employment:

·        Any officer who has / had dealing with a particular firm and its sister concerns before his retirement shall not be allowed to take up a job with that firm.

·        Any officer in an appointment dealing with contracts and procurement shall not be allowed to take up a job with a firm and its sister concerns which has subsisting contract(s) with Ministry of Defence.

·        If the proposed appointment calls for marketing or liaison with Defence Establishments, such appointment shall not be permitted.

·        Appointments with companies / firms which operates in sensitive areas of Defence procurement or which have subsidiary firms having contracts with Ministry of Defence shall not be permitted.

·        Appointments with foreign Governments or foreign firms shall not be allowed (such restriction shall apply to only foreign companies per se and foreign companies investing in India, but not Indian companies entering into foreign collaboration.  Apart from this, only those foreign companies shall be excluded, for purposes of commercial employment, which operate in the Defence sector).

This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Shri Kamlesh Paswan and others in Lok Sabha today.

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