Defence acquisition panel may finalise blacklisting policy on March 23

The Defence Acquisition Council (DAC) headed by Defence Minister Manohar Parrikar is likely to take a call on the blacklisting policy in its meeting on March 23. This is in addition to readying the Defence Procurement Procedure (DPP) 2016, which is likely to be released during Defexpo.

Parrikar plans to officially release the revised DPP on March 28 – the first day of Defexpo India 2016 – to be held in Goa, sources told BusinessLine .

A special meeting of the DAC was held on March 11, which had discussed the blacklisting of defence firms accused of corruption. However, “some more issues were left to be finished” and as a result the matter was postponed for March 23, according to an official.

Although the blacklisting policy is not part of the DPP and will be notified separately, Parrikar wants to have everything on the table before global defence manufacturers gather in Goa to showcase their equipment and seal deals.

While, some major firms such as Bofors and AgustaWestland have been blacklisted in the past, some medium sized firms have also been blacklisted on minor issues of lack of proper paper work, delay in paying fee etc.

However, this time the government proposes to adopt a softer stance and not resort to random blacklisting of defence entities over minor incidents.

This is because procurement of critical defence armaments faces inordinate delays due to allegations of corruption leading to complete disruption of timely supplies.

The new policy is also expected to clarify on use of lobbyists or agents. It may legalise use of agents or lobbyists and also provide for remunerations to be paid to them that has to be declared in advance, sources said.

For international defence OEMs, the DPP and blacklisting policy are two crucial elements in clinching deals worth billions of dollars. Last month while addressing a seminar, Parrikar had said that indiscriminate blacklisting creates supply-chain issues.

During the March 23 DAC meet, the government is also likely to finalise the chapter on strategic partners.

This is expected to be based on the report submitted by former DRDO head VK Aatre.

The committee had recommended establishment of a special department entrusted with the task of selecting private players.

The Centre had firmed up the revised DPP in January with a special focus on indigenous defence equipment manufacturing and greater participation of defense MSMEs. Parrikar had said then that the DPP 2016 will be notified by March-end.