The government has indicated that a new defence procurement policy will be announced in the coming months. The new policy is to ensure that domestic firms get orders for equipments which have been developed through indigenous research.

The move is aimed at making the country more self sufficient in the sector. Currently, firms are hesitant to carry out research and development in the country because the costs are too high and there is uncertainty over whether the armed forced would place orders.

The government will give a push in the research sector by measures like sharing costs with the companies. The government wants more private sector firms to participate in the sector.

It was also indicated that if more than one Indian producer is bidding for the same tender then the contract will be awarded on a sharing basis. Defence production secretary RK Singh explained the formula where lowest bidder would get 65 % of the orders and the other company would get 35 % of the order's share.

He also outlined that the government intends to increase indigenized capability which is in the range of 30% to 35% at present. The government has taken into considerations the views of stakeholders in the sector and would release the new framework in few months.

There are also considerations that the armed forces should get the best systems available. Mr. Singh said, while informing about the exports, that India exported arms, armaments and ammunition worth Rs. 400 crore.

He was speaking at the DefExpo 2010 which has grown as an event in terms of the number of participants over the years. The number of participants touched 650 this year and the number of countries has also risen to 33.

The country is planning to spend $50 billion on the modernization of the armed forces and various countries are competing for supplying these contracts.