Friday, March 4, 2011

India Updates Defense Procurement Policy

March 3, 2011

NEW DELHI — Another update to India’s new Defense Procurement Procedures (DPP 2011) is expected in the first week of April.

Major changes will involve the technology-transfer clause.

The policy will include technologies listed by the Defense Research and Development Organization that will be accepted as offsets.

Currently, technology transfer from foreign vendors doing business with India is mandatory and cannot be charged for in India’s biggest defense procurement — the Medium Multi-Role Combat Aircraft (MMRCA) program to buy 126 fighters.

“The move is welcome,” says one vendor. “In the past, the inability of the Indian government to clarify its policy on offset and technology transfer has rendered Indian technology companies directionless.”

But serious concerns remain. “There is an urgent need to establish a framework [ensuring vendors will] transfer these technologies only to those Indian companies that have mature intellectual property rights governance capabilities,” says the author of a recently released book on innovation and intellectual capital.

DPP 2011 took effect Jan. 1. It included a change to allow domestic security and civil aerospace work to fulfill defense offset obligations, which was welcome news to many prospective international suppliers (Aerospace DAILY, Jan. 7).
- Neelam Mathews

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