Defence Procurement Procedure Draft 2020

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The draft for new Defence Procurement Procedure was put forward by the Defence Minister Shri Rajnath Singh.

Defence Procurement Draft Background

1.       India’s first defence procurement procedure was drafted in 2002 and has since been revised a number of times to achieve self – reliance in defence manufacturing .

2.       A committee under the chairmanship of Director General (Acquisition) was constituted to review and put forward the impact of the dynamic environment on the production and procurement of defence related equipment and  machineries.

About Defence Procurement Procedure

1.       It contains detailed policies and procedures for procurement of goods and services for the Defence Services, organisations and establishments from the capital budget of the Defence Ministry in order to modernise the Armed Forces including the Coast Guard.

2.       The draft aims in ensuring seamless flow from asset acquisition to life cycle support and strengthening the ‘Make in India’ initiative of the Government.

Highlights of the Defence Procurement Strategy Draft

  1.  Increase in indigenous content in various procurement categories by 10% to assist the ‘Make In India’ initiative.
  2.  Leasing has been introduced for acquisition in addition to already existing ‘Buy’ and ‘Make’ to do away with huge capital outlays and periodical rental payments. Here, the lessor can be either a global or an Indian entity.
  3. A new category Buy (Global – Manufacture in India) has been introduced with a minimum 50% indigenous content on cost basis of total value of the contract.
  4. It has abolished the warranty period which would be three to five years and introduced a new system of long-term product support which extends throughout the life of the equipment.
  5. For Software procurement a new system has been introduced as software gets updated at faster rates as compared to other technologies.

With the new defence procurement procedure India can promote economic growth by growing domestic manufacturing industry and realizing it’s global ambitions.

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