Diplomacy

India policy assures business to JVs with Russian firms for military spares

File Photo: Indian prime minister Narendra Modi with Russian president Vladimir Putin.

By N. C. Bipindra

New Delhi: India has come out with a set of new guidelines to govern India-Russia Joint Ventures for spares, and committed orders to such business entities are among the attractions.

The eight-page policy document envisages allowing even single-vendor situation to sign contracts. Single-vendor situation in an acquisition programme is a ‘no-go’ under the existing Defence Procurement Procedure and requires special approvals from the Minister of Defence before the contract can be signed.

Under single-vendor situations, the contracts shall be signed under the new guidelines, provided the India-Russia joint venture shows it can produce the spares and components for Russian-origin and Soviet-era military equipment at a price lower than the imported items, reduce the supply timelines, and there is progressive indigenisation of the product.

The new guidelines were framed as a follow up to the Inter-Governmental Agreement (IGA) on ‘Mutual Cooperation in Joint Manufacturing of Spares, Components, Aggregates and other Material Related to Russian/Soviet origin Arms and Defence Equipment‘ signed during the 20th India-Russia Bilateral Summit held at Vladivostok on Sep. 4. Prime Minister Narendra Modi was in Vladivostok for Eastern Economic Forum hosted by Russian President Vladimir Putin when the Summit took place.

The guidelines stipulate the processes to be followed by various stake-holders towards facilitating setting up of manufacturing units in India by Indian companies in collaboration with Russian Original Equipment Manufacturers (OEMs) for implementation of the IGA, that is, from the initiation stage of ‘identification of parts/material’ to the stage of ‘implementation of contracts’.

The objective of the IGA is to enhance the ‘After Sales Support‘ and operational availability of Russian-origin equipment currently in service in the Indian armed forces by organising production of spares and components locally by the Indian industry by creating joint ventures and partnership with Russian OEMs under the ‘Make in India‘ initiative.

For more details on the Guidelines, download the document:

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