Strategic Partnership Model: India to kick-start Rs. 60,000 crore submarine-project
India is set to commence an ambitious Rs. 60,000 crore submarine project, termed Project 75 (I), the first of its kind under the Strategic Partnership model launched last month. The new model aims to invite more private participation in the defence sector. According to sources, two companies: Reliance Defence and Larson & Toubro are the only ones eligible to participate in the project.
What is the strategic partnership model?
The model aims to invite the participation of Indian private players in building defence equipment including fighter jets and submarines for India, in partnership with foreign entities. The projects will be implemented through Joint Ventures controlled by Indian companies, with FDI capped at 49%. The model further enables Indian companies to benefit from technology transfer from Original Equipment Manufacturers (OEM).
What does the Defence Ministry intend to do?
The Ministry intends to put out an 'Expression of Interest' after which eligible Original Equipment Manufacturers (OEM) will be short listed as per the parameters listed under the Strategic Partnership Model. Through Project 75 (I), the Ministry further intends to carry forward Indian Navy's Project 75, under which six French-designed Scorpene submarines are being built by the Mazgaon Docks Private Limited, Mumbai.
Winds of change
Rigid defence manufacturing norms had kept private players out of the defence sector for a long time. Strategic Partnerships come as a recognition of the fact that self-reliance in defence sector and boost in domestic manufacturing cannot be achieved without getting private players on board. The defence ministry's quick move to kick-start the submarine project after its finalization only a month before, is commendable.
More special partnerships awaited
Special partnerships are further awaited to satisfy demands of Indian Armed Forces including manufacturing single engine fighters for the IAF, multi-role and light utility helicopters for the Navy and Future Ready Combat Vehicles (FRCV) and Future Infantry Combat Vehicles (FICV) for the Army.
