The fate of the $8-billion Future Infantry Combat Vehicle (FICV) project for the Indian Army is expected to be sealed when the Defence Secretary Production Ajay Kumar will meet with the stakeholders next week. Sources confirmed to FE that, “During the expected meeting on Dec 12, the Ministry of Defence (MoD) will decide the fate and the future line of action for the project which is expected to come under the ‘Make II’ category in an effort to involve the private sector in the defence sector to get more active in Make in India initiative.”
If all is clear then the Project FICV will go to the Defence Acquisition Council for approval. To be `Made in India’ it will have minimum 40% indigenous content.
According to sources, “The government is keen that this project is fast-tracked and it will speed up the modernisation of the armoured vehicles of the Indian Army.”
So far three companies including Mahindra and Mahindra, Reliance Defence and Engineering and Titagarh Wagons have sent their proposals to the MoD. The potential Original Equipment Manufacturers (OEM) include US-based General Dynamic, Russian companies under the umbrella of Rosoboronexport, and German Rheinmetall – subject to approval – among others.
As has been reported by Financial Express Online earlier, initially the FICV project which was approved under the strategic partnership model for the armoured vehicle segment was considered under the ‘Make’ category under DPP-2008.
Under the Make II category no funding is required from the MoD, unlike the ‘Make’ category, where the ministry has to provide 90% of funds up to the prototype stage. As per the Chapter–III of DPP-2016, the ‘Make’ procedure for indigenous design, development and manufacture of defence equipment/ weapon systems was simplified in 2016.
Later a new subcategory — Make-II (industry funded) — was introduced with a major focus on development of equipment/ system/platform or their upgrades or their subsystems/sub-assembly/assemblies/components. In this subcategory, no government funding is envisaged for prototype development purposes, but there is assurance of orders on successful development and trials of the prototype.
Under the initial proposal of `Make’ category, the plan was to have three development agencies (DAs) – two from the private sector and one from the Ordnance Factory Board, and the MoD had to give minimum of Rs 500 crore each to the three DAs as per the procedure. While under the Make II category, the ministry hopes to save money, it will ensure that the delayed project will move faster, sources told FE.
The Project FICV which has a lifespan of 32 years, around 2,600 FICVs will replace the Army’s old Russian-origin BMP-2 infantry combat vehicles.
By: Financial Express
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