General Rawat said the new model is expected to fast track Army's modernisation plan as it will bring new technologies and help implement major military manufacturing projects.
The Army has been pressing for updating its weapons systems considering the evolving security scenario in the region and General Rawat said the SP model will help the Army in replacing its ageing fleet of tanks and critical weapons.
"The strategic partnership model is a big ticket thing. It will help the modernisation of armed forces. We have to gradually think of replacing our tanks. In the next seven to eight years, some of our old systems will have to be replaced. It is good to start the process now. Because for production to take place, you need time," the Army Chief told PTI in a recent interaction.
Under the new model, government will allow Indian private sector companies to form joint ventures with foreign defence majors to build fighter aircraft, helicopters, submarines and main battle tanks in India.
Referring to the Army's modernisation programme, General Rawat expressed happiness over its progress and referred to arrival of two ultralight howitzers from the US and also about the Dhanush 155mm artillery gun developed by the DRDO.
"The modernisation programme is moving. It is on fast track. It cannot happen overnight. It is a process," he said, adding the artillery modernisation programme was going on "very very well".
After a 30-year wait for new artillery guns since the Bofors scandal, the Army last month received the first two howitzers from the US as part of an order for 145 long-range guns.
General Rawat said modernisation of the armed forces must be a continuous process, adding the Navy and the Air Force are going to benefit significantly from the SP model.
"Modernisation is a process which must continue and must happen at all times. You will always have some equipment in the Army which is reaching the stage of obsolescence," he said.
Talking about the need to look for new technology for the Army, he said, "You keep getting future technology and future technology becomes current and current will become obsolete. It is a cycle."
The government unveiled the much-awaited strategic partnership (SP) model last week which is aimed at setting up world-class production facilities in India to manufacture submarines, fighter jets and battle tanks.
Asked about his recent comments that the armed forces are not getting their due share of resources, General Rawat said he made the remarks as the defence budget was little less than expected, but added that SP model will offset the shortage.
"The government is going ahead with SP model. It is also going for government-to-government contracts (for military procurement). These steps will help us," General Rawat said.
Last month, the Army Chief lamented that the spending on defence is considered a "burden" by many in the country and the military is not getting its due share.
India's defence budget for 2017-18 was Rs 2.74 lakh crore, which is 1.63 per cent of GDP. China's defence budget is close to three per cent of its GDP.
There has been a feeling among security experts and the defence establishment that the modernisation of armed forces is taking place at a very slow pace and that government has not been allocating adequate funds for it in the last few years.
Asked about the report of the committee headed by Lt General (retd) DB Shekatkar, he said some of the recommendations are being considered for implementation in a phased manner.
"We are working towards it," he said. The committee was appointed in May last year to recommend steps for enhancing combat capability and rebalancing defence expenditure and it had submitted its report to the then Defence Minister Manohar Parrikar in December 2016.