Private sector participation in defence sector: Committee to make recommendations this week

Make in India initiative in the defence sector will get a clear policy direction with the forthcoming recommendations of VK Arte Committee.

The Committee chaired by Arte, who was the former DRDO chief, will submit its report to the Defence Ministry, defining the level of participation of domestic private sector players in defence sector.

It is expected that Arte’s suggestions will also include specifications to the government’s defence procurement from the private sector.

Defence manufacturing has emerged a vulnerable area of the country’s manufacturing as huge amount of money is spent on imports. Efforts to get at least 30% imported products being produced within the country with foreign firms bargaining on high end products making use of India’s emergency defence needs.

The Arte Committee is known to have identified five priority areas for private participation. The players from the private sector will be selected on financial and technical criteria. A minimum lock in period for investment is also proposed by the Committee.

The new selection process will choose private sector firms to participate in the production of strategic military goods like aircraft, helicopters, submarines, ammunition etc.