Army set to close around 80 deals worth ₹15000 cr

Army set to close around 80 deals worth ₹15000 cr

Subject: Science and Technology

Section: Defense

Concept:

• The Army, which is currently executing the fourth tranche of emergency procurements, has identified nearly 80 deals, roughly valued at ₹15,000 crore, the Chief of the Army Staff, General Manoj Pande, said.

Emergency Procurements

• Emergency procurements are carried out to meet critical operational requirements.
• The Indian Army, which has made three tranches of Emergency Procurements (EP) in the last few years, is preparing for a fourth round of EP which will be entirely from the domestic industry.
• Three tranches of EPs were executed, with 68 contracts worth 6000 crores
• The Defence Ministry has previously granted the armed forces emergency financial powers, allowing them to procure weapons systems worth up to 300 crores on a “urgent basis” without any further clearances to shorten the procurement cycle.
• The EP also allows testing of various systems in the field before embarking on larger acquisitions through the capital budget route.

Indigenous Contracts in Army

• It was stated that indigenous contracts have nearly tripled in the last three to four years.
• Domestic industry issued Acceptance of Necessity (AoN) for various contracts totaling 40,000 crores last year.
• Similarly, the Army signed contracts worth 47,000 crores with indigenous industry last year.
• Over the next 7-8 years, approximately 7-8 lakh crore in potential contracts could be placed with the Indian industry. So, the industry has a lot of potential in terms of a viable market.
• The Army’s priority areas for indigenizationwere outlined, which include intelligence, surveillance, and reconnaissance (ISR), mobility solutions in forward areas, particularly the mountains, special armaments such as loitering munitions, artificial intelligence, and encrypted communication.
• The Army is also in the process of inducting new long-range rocket systems, software-defined radios that are less susceptible to jamming, and see-through armour, among other things.
• In the past, it was acknowledged that the Army’s reliance on certain weapon systems, particularly air defence, rockets, missiles, and certain tanks from Russia and Ukraine, and stated that, in terms of the immediate impact, “the supply chain of certain spares and ammunition has been impacted to some extent, but we have adequate stocks to last for a reasonable period of time.”
• The indigenization effort in defense manufacturing is an ecosystem with four foundational pillars: resource allocation, enabling policies, a viable market, and competition.