$12 Billion Project!!! This is Nirmala Sitharaman’s first big move as Defence Minister

September 24, 2017

In the short period that she’s been the first full-time defence minister of the country, Nirmala Sitharaman has shown herself to be proactive and innovative.

She’s been visiting army bases reviewing defence preparedness; she has started a new trend wherein she meets the armed forces chiefs regularly to expedite defence procurement procedures. Now comes her first major move.

A $12-billion project to procure 2,300 Futuristic Infantry Combat Vehicles (FICV) for the Indian Army has been held up for over a decade. It is now that Nirmala Sitharaman has given the deal a push.

State-owned Ordnance Factory Board (OFB) which has been nominated for the project, along with L&T, Tata Motors, Reliance, Mahindra, and Tata Power SED-Titagarh Wagons had responded to the expression of interest (EoI) in the deal in 2015.

It is now being reported that Nirmala Sitharaman has sought details of the project. Further, the matter will come up before the Defence Procurement Board on September 26. Speculations are ripe that the defence minister may bring up the project when she meets US Secretary of Defence James Mattis in the coming days. Even Russia seems keen to clinch the deal through the OFB. This deal is crucial for the modernisation of the army and Nirmala Sitharaman seems intent on taking the deal through.

Officials in the defence ministry are looking to push the deal through under the Strategic Partnership Policy (SPP) which they consider to be ‘an easier and cleaner way’. The SPP aims at creating capable defence manufacturers in the private sector, to compete with the DPSUs and Ordnance Factories that have historically dominated defence manufacture in India. The policy requires private firms chosen as strategic partners to enter technology partnerships with nominated global original equipment manufacturers and jointly bid for contracts to build aircraft, helicopters, submarines, and armoured vehicles for the military.

The Modi government has taken significant steps to replenish the armed forces that weren’t only troubled from outdated weapons and vehicles but even a lack of basic ammunition.

Some major defence deals signed by this government include – 22 AH-64 Apache helicopters, 15 CH-47 Chinook helicopters, 145 M777 Howitzer guns, buying frigates and leasing more nuclear submarines from Russia. Apart from this, India is looking for both surveillance and attack drones from America, and hunting for a 5th generation fighter jet. After decades of ignoring the needs of the forces by the Congress-led UPA, India is finally on the path to modernising its forces under this NDA government.

Vinayak Jain