Exchange Rate Variation in Defence Contracts in India: Charting a Way Forward for MoD Beyond the New MoF Memorandum
Institute for Defence Studies and Analyses (IDSA) Issue Brief dated October 31, 2014
6 Pages Posted: 28 Nov 2013 Last revised: 31 Oct 2014
Date Written: November 27, 2013
Recent depreciation of the Indian Rupee saw increased advocacy by certain sections of the Indian industry for exchange rate protection in government contracts, and one occasion, for incorporating the same in the Public Procurement Bill that was recently placed by the Government before the Parliament. This short academic note analyses industry demands and reviews existing regulations in IT and defence procurement markets, culminating with suggestions on a possible way forward for reforms that can avoid certain adverse implications of industry demands, particularly in view of their potential conflict with important national public policies fostering indigenisation and domestic manufacturing in India.
Keywords: India, Public Procurement, Defence Procurement, Contract Performance, Exchange Rate Variation
JEL Classification: K12, K23
Suggested Citation: Suggested Citation