The artillery guns would be procured as per the "Buy and Make" procedure introduced last year under which 100 such guns would be bought off the shelf while 714 would be made in India. The Indian Army has not acquired artillery guns in the past three decades after the Bofors scam surfaced in 1986.
Sources said at least six tenders have been issued so far but were cancelled due to a number of reasons including blacklisting and single vendor scenario. The plans to acquire such guns were first mooted under Army's Field Artillery Rationalisation Plan (FARP) formulated in 1999.
The decisions were taken after Parrikar chaired his maiden meeting of the Defence Acquisition Council (DAC) here this morning. Defence Ministry sources said the DAC has cleared the long pending proposal to acquire 814 mounted guns of 155mm/52 calibre.
Sources said a fresh Request for Proposal (RFP) would be issued for the procurement which will be open to public as well as private companies. The Indian private companies that are likely to make a bid for this project include L&T, TATA and Bharat Forge.
"The Indian company, when selected, will be the lead partner now. They can either show their ability to make the product completely here or tie-up with a foreign firm and build the guns here," a source said.
Talking about the multi-crore joint bid by Tata Sons and European firm Airbus to manufacture 56 transport aircraft to replace the Avro fleet of the Indian Air Force (IAF), sources said the DAC has sought additional information. A similar decision was also taken on the proposal to acquire an additional 106 Swiss Pilatus basic trainer aircraft for the IAF at an estimated cost of about Rs 8,200 crore.
The DAC also approved the revised payment schedule of Rs 7,160 crore for the IAF's Integrated Air Command and Control System which aims to integrate all ground and air censors.
The IAF currently has five sector headquarters (nodes) of communication and the plan is to have five four more besides 10 sub-nodes and up-gradation of the entire system.
Parrikar, who comes with an IIT background and has himself being an entrepreneur, stressed that the procurement policy should be fast and transparent.
According to the Ministry sources, Parrikar said that the DAC could be held for more than a month and with lesser agenda. As of now, the Ministry is aiming to hold DAC at least once a month.
During the discussion on Saturday, the issue of "Make In India" initiative of Prime Minister Narendra Modi also came up. Sources said there would be more discussion on the matter and the effort is to make the entire process more attractive to foreign investors.
The DAC, set up in 2001 as part of the post-Kargil reforms in defence sector, approves the long-term integrated perspective plan for the forces, accords acceptance of necessity (AON) to begin acquisition proposals, and has to grant its approval to all major deals through all their important phases.
It also has the power to approve any deviations in an acquisition, and recommends all big purchases for approval of the Cabinet committee on security.