Amid India-China Standoff, Armed Forces Inked Rs 23,500 Crore Contracts For Emergency Procurements In Last One Year

In response to the prolonged military standoff with China in eastern Ladakh, India has escalated its emergency capital procurements, inking contracts valued at around Rs 23,500 crore over the past year, according to reports by The Times Of India.

These rapid acquisitions are strategically geared towards addressing critical operational deficiencies that have emerged during the protracted four-year-long standoff.

The procurement portfolio encompasses a diverse array of weapons and equipment, spanning missiles, remotely-controlled weapons, precision-guided munitions, drones, counter-drone systems, communication apparatus, surveillance technology, radar systems, personal protective gear, and all-terrain and high-mobility reconnaissance vehicles.

Sources within the defence establishment emphasise that these emergency procurements hold significant import and have been expedited through an accelerated procurement process, distinctly separate from the more protracted pathways of large-scale capital acquisition cases.

Impressively, the armed forces have made substantial strides in this endeavour. For instance, the Indian Army, in the EP-4 tranche from September 2022 to September 2023, alone secured over 70 capital acquisition deals amounting to nearly Rs 11,000 crore.

In parallel, the Indian Air Force (IAF) inked 65 contracts valued at over Rs 8,000 crore, while the Indian Navy closed 35 contracts worth Rs 4,500 crore during the same period.

A noteworthy development in this phase is the exclusive focus on domestic manufacturers for procurement, contrasting with previous tranches that featured deals with nations such as Russia, Israel and France.

Previously, the scope of emergency procurements encompassed equipment like the French 'Hammer' air-to-ground precision-guided munitions, specifically designed for India's new Rafale fighter jets.

These munitions boast the capability to target bunkers and shelters within a range of 20 to 70 kilometres. Other notable items included Israeli 'Heron' Mark-2 unmanned aerial vehicles and 'Spike' anti-tank guided missiles.

The genesis of these procurement powers can be traced back to the government's decision to grant capital and revenue financial authority to the army, navy and air force for a limited period, primarily for the purpose of facilitating "emergency and critical contracts".

This move was triggered in the wake of the Uri terror attack in September 2016, which also contributed to heightened tensions with Pakistan. The objective behind this empowerment was to amass stocks and spares essential for national security.

Subsequently, following multiple Chinese intrusions into eastern Ladakh in April-May 2020, these emergency powers were extended.

Within the framework of the capital EP mechanism, the army has been actively engaged in negotiating 140 contracts, amounting to Rs 17,500 crore. Notably, 68 of these deals, worth Rs 6,500 crore, were executed in the first three tranches.

Recent global conflicts, including the Armenia-Azerbaijan and Russia-Ukraine clashes, have underscored the strategic importance of drones and AI-enabled drone technology in modern warfare.

In direct response to this evolving landscape, the army has earmarked approximately Rs 1,500 crore for 14 projects related to drones and counter-drone systems across the first three EP tranches.

Furthermore, an additional allocation of Rs 2,000 crore has been designated for 10 additional projects in EP-4, further underscoring the strategic significance and increased investment in this cutting-edge technology.