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India Moves Toward Faster Defense Acquisitions
By VIVEK RAGHUVANSHI
Published: 25 Jun 2010 12:46
NEW DELHI - India's Finance Ministry has proposed new regulations that would allow the Defence Ministry to award contracts worth up to $108.6 million - up from the current $21.7 million limit - without Finance Ministry approval, a Defence Ministry official said.
In addition, only defense contracts of more than $217.3 million must be brought to the Cabinet Committee of Securities (CCS).
The changes are expected to take effect in the next month, the Defence Ministry official said.
Under existing rules, the Defence Ministry at the end of each budget year has been forced to surrender more than $1 billion in funds allocated to buy new weapons and military equipment because of bureaucratic procedures that delay final contract decisions. The changes by the Finance Ministry should help clear at least a dozen defense contracts valued at around $100 million each year.
The changes will facilitate the quick approval of spare parts and maintenance contracts for the Indian military, the Defence Ministry official said.
Ministry sources said the government also is considering increasing the limit of foreign direct investment in Indian defense companies from the current 26 percent level to as much as 74 percent.
While the Defence Ministry is not keen to extend the limit to 74 percent, the Commerce Ministry has indicated on several occasions that such an increase would enable the meaningful collaboration of major foreign companies with Indian companies, and thereby boost defense production here, the sources said.
India Moves Toward Faster Defense Acquisitions - Defense News
By VIVEK RAGHUVANSHI
Published: 25 Jun 2010 12:46
NEW DELHI - India's Finance Ministry has proposed new regulations that would allow the Defence Ministry to award contracts worth up to $108.6 million - up from the current $21.7 million limit - without Finance Ministry approval, a Defence Ministry official said.
In addition, only defense contracts of more than $217.3 million must be brought to the Cabinet Committee of Securities (CCS).
The changes are expected to take effect in the next month, the Defence Ministry official said.
Under existing rules, the Defence Ministry at the end of each budget year has been forced to surrender more than $1 billion in funds allocated to buy new weapons and military equipment because of bureaucratic procedures that delay final contract decisions. The changes by the Finance Ministry should help clear at least a dozen defense contracts valued at around $100 million each year.
The changes will facilitate the quick approval of spare parts and maintenance contracts for the Indian military, the Defence Ministry official said.
Ministry sources said the government also is considering increasing the limit of foreign direct investment in Indian defense companies from the current 26 percent level to as much as 74 percent.
While the Defence Ministry is not keen to extend the limit to 74 percent, the Commerce Ministry has indicated on several occasions that such an increase would enable the meaningful collaboration of major foreign companies with Indian companies, and thereby boost defense production here, the sources said.
India Moves Toward Faster Defense Acquisitions - Defense News
