Strategic Partnership Policy: Big Picture of Privatization of Defense (Download PDF)

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India՚s first private sector missile sub-systems manufacturing facility- Kalyani Rafael Advanced Systems (KRAS) plant was inaugurated near Hyderabad. Established under ‘Make in India’ initiative with new policy to encourage private participation in defense production

Privatization of Defense India
  • 51: 49 joint venture between India՚s Kalyani Group and Israel՚s Rafael Advanced Defense Systems Ltd.
  • Promotes government policy for indigenization of defence equipment and weapons.

Objectives of KRAS

  • One-stop solution provider to locally re-design, develop, re-engineer and manufacture various land and airborne products and systems in India.
  • Invested in designing, developing and manufacturing of weapon systems including Spike Anti-Tank Guided Missile (ATGM) systems and remote weapon systems.
  • Tasked to develop a wide range of advanced capabilities like command control and guidance, remote weapon systems, electro-optics, precision guided munitions and system engineering for system integration.
  • Tasked with supplying defense equipment to the Indian Army and export to South East Asian countries.

About the KRAs Plant

  • Will employ more than 300 engineers and provide indirect employment to 1,000 people.
  • Localization content of the plant is 90 % with most of the vendors in and around Hyderabad.

Strategic Partnership Policy: Big Picture of Privatization of Defense

  • Government had earlier approved strategic partnership policy allowing four sectors - helicopters, submarines, armored vehicles and fighter jet to be pushed into private hands.
  • A pool of six Indian companies created to accord a special status for defense manufacturing selected based on financial strength and technical expertise.
  • The pool of companies would be given the opportunity to bid for mega defense production orders, expected to be worth over $ 20 billion.
  • Once the foreign vendors are shortlisted, the Indian pool would be invited to plan collaborations and present joint proposals that would be the basis of a final selection.
  • One Indian company allowed participating in only one strategic partnership project, to avoid a monopoly.

- Published/Last Modified on: September 5, 2017

Defense

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