Covid-19 crisis: Defence ministry gives more time to vendors to fulfil contracts

Share

The defence ministry on Friday announced it has extended the delivery period for existing capital acquisition contracts with Indian vendors by four months because of supply chain disruptions caused by the Covid-19 pandemic.

An order from the ministry’s acquisition wing, and approved by defence minister Rajnath Singh, noted that “force majeure shall be applicable for a period of four months i.e. 25th March 2020 to 24th July 2020”, said a defence ministry statement.

Force majeure refers to unexpected circumstances that prevent someone from fulfilling a contract.

The duration of the force majeure will be excluded while calculating the delay in delivery of the contracted equipment or service and imposition of liquidated damages charges, the statement said.

“This measure would bring a big relief to the domestic defence industry whose production schedules have been adversely affected by the Covid-19 situation,” a spokesperson said.

Foreign vendors can approach the defence ministry directly, which may consider cases on the basis of the situation prevailing in their respective countries, he added.

It couldn’t immediately be ascertained how many capital acquisition contracts would benefit from the order or the total quantum of equipment involved.