India is one of the world’s fastest-growing defense/ security equipment market, recently India was ranked as the world’s fastest-growing security equipment market. India will be spending $30 billion in the next five years and further $100 billion over the next decade. India offers tremendous opportunities for U.S. defense and technology companies in aerospace, government contracting, and homeland security. But to meaningfully participate in the India defense opportunity, one must understand and be prepared to navigate through some nuanced and complex terrains.

The security equipment are purchased by each department, state police, Airforce, Army and Navy based on their requirements. Every purchase order is done through the public bidding process comprising of technical and price bid. The final decision is taken by the committee formed for the purpose of the purchase of specific equipment. The bid documents contain the detailed specification of the equipments and the process for participating in the bid.

Indian government has revised the purchase policy to encourage the local Indian companies to manufacture and develop the technology. The Defence Procurement Procedure (DPP), which governs procurement by the Indian Ministry of Defence (MOD). The DPP sets out the Government of India’s (GOI) policies for every step in the procurement process, from acquisition planning to preparing requests for proposal (RFPs). Compliance with the DPP is essential to competing effectively for Indian defense contracts.

In November 2009, the MOD amended the DPP and added an important fourth procurement category called ‚Buy & Make (Indian).‛ Under Buy & Make (Indian), the RFP will be issued only to Indian vendors, who in turn can decide what foreign suppliers to involve. This is intended to more effectively incentivize technology transfer and co-development in India.

Buy & Make (Indian) is aimed at helping promote indigenous capabilities by driving technology transfer, joint ventures, licensed production and in-country manufacture. The MOD has not yet publicly indicated which projects will be designated Buy & Make (Indian), but for those which are so designated, Indian bidders will be in control of the process. Thus, non-Indian companies that wish to participate in this category of procurement should think ahead about identifying prospective Indian partners and crafting collaborative arrangements that can satisfy these requirements.

There are various of reasons why agents may be necessary in defense and homeland security bidding. Bidders without an institutional presence in-country may believe it is particularly necessary to have third parties acting on their behalf. But one needs to proceed with caution under the Indian defense procurement rules on agency. The Indian government is particularly sensitive to the role of agents in defense procurement. Penalties for non-compliance can include disqualification from the procurement, cancellation of the contract, and debarment from future bidding.