New Delhi, Sep 1 (IANS) The definition of ‘Indian vendor’ in context of the Defence Acquisition Procedure 2020 has created a major row with an influential RSS-linked body that earlier urged the Indian government to withdraw from the RCEP, now claiming that the definition “dilutes” the government’s very idea of ‘Atmanirbhar Bharat’ in the defence sector.
The crux of the anger is a webinar held on August 27 where the Union Secretary for Defence Production allegedly clarified during a Q&A session, that any foreign company registered in India is an “Indian vendor”.
Following this, the Swadeshi Jagran Manch, an influential RSS-linked body that has often forced the Narendra Modi government to backtrack on many initiatives, shot off a letter to the Prime Minister escalating the matter. The body claimed that this is “destined to take away the gains for domestic defence industry from the previous policy initiatives like ‘Buy IDDM (Indigenously Designed, Developed and Manufactured)’ and banning of 101 items from imports”.
SJM national co-convener Ashwani Mahajan explained to Modi, that “Swadeshi Jagran Manch is of the considered opinion that ‘Indian vendor’ should only mean an entity in which majority ownership and control is retained by Indian Resident Citizens. Diluting the definition of ‘Indian vendor’ will be a deadly blow to the Indian defence industry.
“It would deal a severe blow to the existence of the domestic defence industry, both big and small which has developed indigenously, as foreign companies would start getting same treatment, which domestic industry gets especially under Buy Indian (IDDM) and ‘Buy Indian’ categories where special preferences are given to Indian vendors.”
The strongly-worded letter, though praised Modi’s efforts like announcement of banning import of 101 defence goods as it warned if the definition of ‘Indian vendor’ is not corrected with immediacy, “the dream of self-reliance in defence production, which is so close to your heart, itself will die down”.
The letter also said that if a foreign company is registered in India, and has started making in India, its technology policy is still governed by the laws of the country of its origin and not India.
“We are of the considered opinion that procurement from companies registered in India, where majority shareholding is that of foreigners, is no different from imports, as they would be either importing their components from foreign destinations or would be contracting with companies of their choice, with little chance of developing domestic capabilities,” it read.
As a solution, the RSS-linked body suggested companies registered in India but owned by foreigners, should not be included in this category. Moreover, it also opined that preference in government procurement must be given to Indian companies, particularly companies having Indian shareholding of 51 per cent or above.
However, the bone of contention remains the “clarification” given by Union Secretary for Defence Production during a Q&A in the webinar on August 27.
Mahajan concluded his letter to Modi by saying, “Swadeshi Jagran Manch, therefore, appeals you to instruct the concerned office to revise the definition of ‘Indian vendor’ in DAP, 2020 in very clear terms so that under ‘BUY’ and ‘BUY and MAKE’ categories, foreign entities do not get any advantage over entities owned and promoted by Indian resident citizens.”