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Why the $8-billion Future Infantry Combat Vehicle project of the Indian Army continues to be delayed

Huma Siddiqui

The fate of the $8-billion (approx Rs 60,000 crore) Future Infantry Combat Vehicle (FICV) project for the Indian Army which has been getting delayed will now be decided by the next government. Sources have confirmed to Financial Express Online that the project that had been moved to the Make II category of the DPP-2016 last year in an effort to expedite it is stuck due to the lack of decision from both service headquarters and the Ministry of Defence (MoD).

The MoD has been pushing the industry to invest 90 per cent funds to develop the prototype of the FICV which is for modernising the Armoured Vehicles of the Indian Army; however, due to lack of any commitment from the end user there has been reluctance from the industry. Industry sources pointed out that there have been long delays as the MoD and the Service Headquarters have yet to decide on the requirement of the vehicles. Sources have said that there have been differences of opinion between the end user the Indian Army and the MoD which has pushed the critical programme under the Make-II category.

As has been reported earlier, there has been divergence of views between the MoD and the Indian Army since last year related to the payment for this project. A senior officer had confirmed the same to Financial Express Online. Though the reason cited for putting the project under Make II category was to fast track the process of modernising the Armoured Vehicles of the Indian Army, now the long-delayed project will wait for the new government.

The FICV which is to be made in India is expected to have minimum 40% indigenous content. Companies including Titagarh Wagons, Reliance Defence and Engineering and Mahindra and Mahindra have sent their proposals to the MoD. Subject to approval some of the potential Original Equipment Manufacturers include Russian companies under the umbrella of Rosoboronexport, US-based General Dynamic and German Rheinmetall.

The FICV project was earlier approved under the Strategic Partnership (SP) model for the armoured vehicle segment under the Make category according the DPP-2008 before being moved to Make II of DPP-2016. The DPP-16 states that in Make II category no funding is required from the MoD, whereas in the Make category, the ministry has to provide 90% of funds up to the prototype stage. The Chapter III of DPP-2016 has specified that the Make procedure for indigenous design, development and manufacture of defence equipment/ weapon systems was simplified in 2016.

Around 2,600 FICVs with a life span of 32 years, are expected to replace the Army s old Russian-origin BMP-2 infantry combat vehicles by 2025.