The Defence Acquisition Council (DAC) approved the implementation of strategic partnership guidelines on July 30, 2018. It is a major decision that will encourage private sector participation in domestic defence manufacturing.
The Strategic Participation (SP) model consists of four segments: submarines, single engine fighter aircraft, helicopters and armoured carriers/main battle tanks. Private sector will be able to participate in all these four segments.
According to the policy, one Indian private company would be selected in each segment to tie-up with select global equipment manufacturing companies to manufacture the platforms in India under technology transfer. Although the policy came into effect in May 2017, it failed to make substantial progress for lack of clear policy guidelines.
As per the defence ministry, the model aims to revitalise defence industrial ecosystem and progressively build indigenous capabilities in the private sector to design, develop and manufacture complex weapon system for future needs of armed forces. The policy emphasises on transfer of niche technology and higher indigenous content. All procurements would be executed by specially constituted empowered project committees to bring efficiency and timely execution of the projects under the model.