In the spirit of ‘Make in India' programme, the government should set an indigenisation target within a time frame to encourage domestic companies to take part in manufacturing of the Defence equipment and facilities, the Associated Chambers of Commerce and Industry of India ASSOCHAM has said.

It is only then the home-grown companies will be able to participate in the multi-billion dollar Defence procurement it added.

In a detailed representation submitted to the Defence Ministry, the chamber has said, "stringent conditions" which block the entry of domestic firms into the defence procurement of the government should be diluted. This should be done "in order to make it easier and more attractive for Indian vendors who are investing in high risk areas".

It said the existing arrangement of contracts to be awarded to Defence Public Sector Undertaking (DPSU) on a nomination basis proves to be disincentives for the private players, "thereby leading to lack of level playing field for the private players". ASSOCHAM strongly recommended that the provision for nominations should be deleted / restricted to clearance by Cabinet Committee on Security (CCS).

"With billions of dollars worth of Defence contracts going to foreign firms, the Indian firms are denied access to the same, mostly on the ground of lack of track record and experience. It is a chicken and egg situation", noted the chamber.

"Unless, the home -grown firms are allowed entry, how would they get experience and track record? The entire mind set and system of procurement should be changed in a manner to support domestic industry and entrepreneurship.

Continued to the next page