Framework for placing Long Term Orders for Indigenization by Defence PSUs and OFB

Further to the previously notified ‘Policy for indigenization of components and spares used in defence platforms for DPSUs/ OFBs’, the Department of Defence Production (DDP) has now approved a ‘Framework for placing Long Term Orders for indigenization by Defence PSUs and OFB’. The notification is attached for your ready reference. While the former laid down strategies to give preference to the indigenization of components or sub-assemblies, the latter now addresses the challenge faced by the industry – the fact that the number of such items required at any given point of time are too small and it does not make economic sense for the industry to then invest in its development/indigenization. In order to address such barriers to growth, the Government has now laid down a framework by which a procuring organization may aggregate demand of an item (components, materials, spares, sub-systems, or equipment) for a long-term period of a maximum of 10 years. Key features of this framework are provided in this update.