Rajnath Singh releases India's new Defence Acquisition Procedure amid India-China border dispute

• India’s Defence Minister Rajnath Singh released India’s new Defence Acquisition Procedure 2020 today afternoon in the national capital, New Delhi.
• It will be applicable starting October 1.
• The policy has special incentives for products designed and developed by Indian vendors.
• It also has a new manufacturing category that will encourage foreign vendors to set up manufacturing facilities in India, according to Singh.

As tensions between India and China continue to simmer along the Line of Actual Control (LAC) in Ladakh, Indian Defence Minister Rajnath Singh unveiled the country’s new Defence Acquisition Procedure (DAP). The policy will be applicable starting October 1.


“The DAP 2020 has adequately included provisions to encourage FDI to establish manufacturing hubs both for import substitution and exports while protecting the interests of Indian domestic industry,” said Singh.

The policy contains special incentives for Indian designed and developed products, promotes the use of offsets for exports, and has introduced a new category that will encourage foreign vendors to set up manufacturing facilities in India, according to him.

The DAP 2020 will eventually replace the existing Defence Procurement Procedure (DPP) 2016. As compared to the previous draft, a new procurement category has been introduced dubbed Buy (Global) - Manufacture in India. “The new category incorporates manufacture of either the entire/part of the equipment or spares/assemblies/subassemblies/Maintenance, Repair and Overhaul (MRO) facility for the equipment, through its subsidiary in India,” the Ministry of Defence (MoD) described in a statement.

Category	DPPP 2016	DAP 2020
Buy (Indian-IDDM)	Min 40%	Min 50%
Buy (Indian)	Min 40%	Indigenous design – Min 50% Otherwise – Min 60%
Buy and Make (Indian)	Min 50% of Make	Min 50% of Make
Buy (Global) — Manufacture in India	NA	Min 50% of Buy plus Make
Buy (Global)	NA	Min 30% for Indian vendors

*IDDM = Indian designed, developed and manufactured
Source: Press Information Bureau

The ‘offset’ guidelines have been revised to give preference to manufacturers of complete defence products over components, according to him. Various multipliers have been added to incentivise discharge of offsets.

Here are some other big changes that will come into effect starting October 1 as the DAP 2020 comes into effect:

• Time-bound defence procurement process and faster decision making: A Project Management Unit (PMU) has been mandated to support contract management. It will facilitate obtaining advisory and consultancy support in specified areas to streamline the acquisition process.
• Request For Information (RFI): RFI stage will explore the willingness of the prospective foreign vendors to progressively undertake [the] manufacture and set up an indigenous ecosystem at the spares/sub-component level.
• Co-production through Intergovernmental Agreements (IGAs): This enables the establishment of co-production facilities through IGA achieving import substitution and reducing life cycle cost.
• Simplification of Trial Procedures: Emphasis on the need to conduct trials to nurture competition based on the principles of transparency, fairness, and equal opportunities to all and not as a process of elimination.
• A separate dedicated chapter has been incorporated in the DAP 2020 for the acquisition of systems designed and developed by DRDO/DPSUs/OFB: A simplified procedure with Integrated Single Stage Trials to reduce timelines and lay greater emphasis on evaluation through certification and simulation.

India’s three service chiefs, General MM Naravane, Admiral Karambir Singh and Air Chief Marshal RKS Bhaduria, along with Chief of Defence Staff (CDS) Bipin Rawat, were present at the event.

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