In line with the Make in India, under the new category of defence buying called Buy Indian-Indigenously Designed, Developed and Manufactured (IDDM), the Ministry of Defence (MoD) has mandated for a domestic vendor, at least 60 percent home-grown content on cost of the contract in products not designed or developed within the country.The category, introduced in the latest Defence Procurement Procedure (DPP), that is considered the bible for defence buying in India, is heavily tilted in favour of IDDM and another category – Buy and Make (Indian).<!– /11440465/Dna_Article_Middle_300x250_BTF –>A PwC-ASSOCHAM report ‘Make in India: Achieving self-reliance in defence production’ , released earlier this week has said that IDDM will bring critical changes in favor of home grown production of defence equipments and arms, besides bringing to fore the scientific and technological talent within India. Currently, close to 70 per cent of India’s military hardware requirement is import-dependent and Make in India is being pushed for balancing out this huge gap in import-export ratio.The provisions under IDDM would ensure that an Indian vendor meets either of the two conditions – products that have been indigenously designed, developed and manufactured have a minimum of 40% domestic content on cost basis of the total contract value. Those not indigenously designed and developed should have 60% of domestic content. The new provisions also reads that apart from an overall indigenous content , the same percentage of it will also be required in basic cost of equipment, cost of spares and cost of special maintenance tools and special test equipment. Under the other category of Buy and Make (Indian) where too the DPP tilts heavily, whereas there is an initial procurement of fully produced equipment, an Indian vendor engaged in a tie-up with a foreign manufacturer does indigenous production in a phased manner involving the transfer of technology . Under this category of procurement, a minimum of 50% indigenous content is required on cost basis .
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