New Delhi, May 12 (KNN) Defence Minister, Arun Jaitley held discussions with  the industry  representatives on Thursday regarding the revised criteria for strategic partnership but participation of MSMEs remained a moot point.

World over, in US, France, Britain etc defence based industries have thrived on an ecosystem of tier 1 and 2 vendors, largely MSMEs, who supply the components to the mother plant to assemble the main platform.

It may be mentioned that about a year back the then Defence Minister, Manohar Parrikar had announced the much awaited Defence Procurement Policy.

The Policy will guide the long term procurement of large defence platforms with a thrust on indigenisation.

Towards implementation of  ‘Make in India’, in Defence acquisitions, the Policy conceptualised strategic partners, Indian private companies who will be entrusted to make one platform, Fighter Aircrafts, Submarines,  Tanks, Helicopters etc.

KNN India has learnt from reliable sources that Defence Secretary stated in the above meeting that participation of MSMEs in defence equipment supply chain and development of an ecosystem for defence industries are the underlying objectives of the strategic partnership concept.

With a long term contract of say, 30 – 40 years, these strategic partners will be crucial verticals for defence capital equipment manufacturing in India.

However, the nearly two hour long discussions veered around the logics of whether existing manufacturers in defence equipment will get priority over the new entrants in selection of strategic partners.

When approached for comments, the head of MSME Defence Suppliers Group of FISME, refused to come before the camera, but mentioned that if Government is really interested in ‘Make in India’ in defence,  at least 50% procurement from Indian vendors and half of it from MSMEs  should be stipulated criteria for strategic partners.

It may be mentioned that even after 40 years of repeated political statements of indigenisation of defence manufacturing, India remains the largest cash buyer of defence items in the world market.

While too much reliance on the public sector may be an important reason, absence of a vision for developing an ecosystem for defence industries is the crucial failure.

If India fails to develop this eco-system, the defence strategic partner will find it easy to import the components and assemble here, the so called screw driver manufacturing.

According to one expert in defence, such ecosystems cannot be developed without the Government laying a roadmap for development of infrastructure for defence MSME clusters and providing financial support for long gestation projects.

At the same time the strategic partners also need to be mandated to show their capability for developing value chains to be selected. (KNN/ DB)