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

Image of Privatization of Defense india

Image of Privatization of Defense India

Image of 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


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