MoD to roll out strategic partnership model for defence sector

The Ministry of Defence (MoD)  may soon introduce strategic partnership (SP) model in the defence sector in an attempt to awaken the competitive strive in the sector and to overcome the capacity and infrastructural constraints of defence PSUs.  
 
Defence Minister Arun Jaitely chaired a meeting of senior defence ministry officials and defence industry heads on May 11, 2017 to finalize the draft on strategic partnership model. However, the proposal is supposed to be presented to Defence Acquisition Council, the ministry’s apex procurement body, on May 15, 2017.       

Under the SP model, the Indian defence firms will be able to set up military platforms in collaboration with major foreign manufacturers for a specific period of time.

The SP model was being resisted by some of the MoD bureaucrats on account of disagreement over the entrance of a single private strategic partner in each segment, such as aircraft and helicopters, armoured fighting vehicles, submarines, ammunition and macro process management of issues.

In the wake of major policy decisions, the stocks of defence PSUs are likely to surge, while private sector defence players such as L&T, Tata, Mahindra Defence and Reliance Defence are expected to be the major gainers.