NEW DELHI: The defence ministry is now set to once again revise the Defence Procurement Procedure (DPP), with the declared aim being to further increase indigenous arms manufacturing and reduce timelines for procurement of defence equipment.
Defence minister Rajnath Singh on Friday released the new draft DPP, which provides for incentives for local material and software as part of ‘Make in India’, after-sales support in capital acquisition contracts, leasing of defence equipment for the first time and a new category of “Buy (Global – Manufacture in India)”.
“Our aim is to make India self-reliant and a global manufacturing hub. The government is striving to formulate policies to empower the private industry, including MSMEs, in order to develop the eco-system for indigenous defence production,” said Singh.
Noting the defence industry was a strategically important sector having huge potential for growth, he added, “With the experience gained by the industry and the MoD, it is now time to take further steps to strengthen the ‘Make in India’ initiative, refine life-cycle support of procured equipment and platforms and hasten the defence acquisition process by further simplifying the procedures and reducing the overall procurement timelines.”
But all this will take some doing. It still takes several years after a case gets the initial “acceptance of necessity” (AoN), which is followed by the floating of the initial tender or RFP (request for proposal), field trials, commercial evaluation and the like, before the final contract is anywhere close to being inked. The entire process, of course, is also often derailed by complaints and corruption allegations, leaving the service concerned without the weapon or platform it wanted to induct for years on end.
The new category of “Buy (Global – Manufacture in India)” in the draft DPP, formulated by a high-level committee headed by MoD’s director-general (Acquisitions) Apurva Chandra, has been introduced with minimum 50% indigenous content on cost basis of total contract value.
“Only the minimum necessary will be bought from abroad while the balance quantities will be manufactured in India. This would be in preference to the ‘Buy Global’ category as manufacturing will happen in India and jobs will be created in the country,” said an official.
Similarly, “leasing” has been introduced as a new category for acquisition in addition to existing ‘Buy’ and ‘Make’ categories to substitute huge initial capital outlays with periodical rental payments. “Leasing is permitted under two categories — Lease (Indian) where the lessor is an Indian entity and is the owner of the assets, and Lease (Global) where the lessor is a global entity. This will be useful for military equipment not used in actual warfare like transport fleets, trainers, simulators etc,” said the official.
Defence minister Rajnath Singh on Friday released the new draft DPP, which provides for incentives for local material and software as part of ‘Make in India’, after-sales support in capital acquisition contracts, leasing of defence equipment for the first time and a new category of “Buy (Global – Manufacture in India)”.
“Our aim is to make India self-reliant and a global manufacturing hub. The government is striving to formulate policies to empower the private industry, including MSMEs, in order to develop the eco-system for indigenous defence production,” said Singh.
Noting the defence industry was a strategically important sector having huge potential for growth, he added, “With the experience gained by the industry and the MoD, it is now time to take further steps to strengthen the ‘Make in India’ initiative, refine life-cycle support of procured equipment and platforms and hasten the defence acquisition process by further simplifying the procedures and reducing the overall procurement timelines.”
But all this will take some doing. It still takes several years after a case gets the initial “acceptance of necessity” (AoN), which is followed by the floating of the initial tender or RFP (request for proposal), field trials, commercial evaluation and the like, before the final contract is anywhere close to being inked. The entire process, of course, is also often derailed by complaints and corruption allegations, leaving the service concerned without the weapon or platform it wanted to induct for years on end.
The new category of “Buy (Global – Manufacture in India)” in the draft DPP, formulated by a high-level committee headed by MoD’s director-general (Acquisitions) Apurva Chandra, has been introduced with minimum 50% indigenous content on cost basis of total contract value.
“Only the minimum necessary will be bought from abroad while the balance quantities will be manufactured in India. This would be in preference to the ‘Buy Global’ category as manufacturing will happen in India and jobs will be created in the country,” said an official.
Similarly, “leasing” has been introduced as a new category for acquisition in addition to existing ‘Buy’ and ‘Make’ categories to substitute huge initial capital outlays with periodical rental payments. “Leasing is permitted under two categories — Lease (Indian) where the lessor is an Indian entity and is the owner of the assets, and Lease (Global) where the lessor is a global entity. This will be useful for military equipment not used in actual warfare like transport fleets, trainers, simulators etc,” said the official.
