The Ministry of Defence (MoD) has extended the delivery period of all existing capital acquisition contracts with Indian vendors by four months to offset the supply chain disruptions caused by COVID-19 restrictions.
“An order to this effect issued on Friday by the acquisition wing of the Ministry and duly approved by Defence Minister Rajnath Singh, states that the Force Majeure shall be applicable for a period of four months, March 25, 2020 to July 24, 2020,” the MoD said in a statement.
The order states that the “duration of this Force Majeure will be excluded while calculating the delay in delivery of contracted equipment or service and imposition of liquidated damages charges.”
With respect to the foreign vendors, the MoD said they could approach the Ministry “which may consider cases on the basis of the situation prevailing in their respective countries.”
The move is expected to bring relief to the domestic defence industry, whose production schedules have been adversely affected by COVID-19 situation. The MoD order, however, adds that the Indian vendor is free to deliver the contracted items well within the extended delivery period. Also, as per the order, no separate contract specific amendments are required to be made to give effect to this decision.
Several import deals have also been slightly delayed due to the pandemic. Arrival of the first batch of Rafale fighter jets from France has been delayed from May to July end. Similarly, the delivery of the first of the four P-8I long-range patrol aircraft by Boeing has been moved from May to July.
