Better Late Than Never

Rohan Ramesh

In line with the government’s ‘Make in India’ drive, the Ordnance Factory Board (OFB) has undertaken steps to indigenise defence production in ordnance factories. The OFB has come out with its procurement manual 2018, which underlines import substitution of stores procurement with indigenous manufacturing. The 286-page manual is exhaustive and seeks to enhance ease of doing business, creating a level playing field for indigenous vendors and start-ups.

Ammunition at OFB stand

The detailed manual lists out items that the various units under OFB are importing, which vendors with production facilities can produce. Most of these made-to-order items are currently being imported and build indigenous vendor capacity and encourage production in the private sector. In order to encourage private production, way back in 2009 itself, the ministry of defence (MoD) had kept OFB out of the Defence Procurement Manual (DPM) brought out by the MoD that year.

Indigenisation of major parts of the inputs required to produce military hardware faces major challenges. Most of such parts have very stringent quality specifications that are normally not applicable in commercial production eco-systems, and therefore, are available only as made-to-order. Most of them have limited order book scope, discouraging suppliers, for whom scale of production, stability and regularity of orders are a major requirement.

Also, with clear defence specifications, most such items have no scope in other fields of applications. Also, defence factories’ inventories are dictated by the strategic security environment, and hence the order book volatility deters vendors and suppliers from setting up production and supply chains.

The OFB manual seeks to meet such challenges and develop a procurement policy that can overcome the problems, and yet set up a rational, indigenous production and supply system, that can save valuable