Recently, the Ministry of Defence (MoD) released a new Defence Acquisition Procedure (DAP) 2020, formerly known as the Defence Procurement Procedure or DPP. The DAP details policies and procedures for procurement and acquisition from the capital budget of the MoD, aimed at modernising the Armed Forces including the Coast Guard.
Background
The first Defence Procurement Procedure (DPP) was promulgated in 2002. In order to review the Defence Procurement Procedure (DPP) 2016, a committee was formed under the chairmanship of the Director General (Acquisition). Replacing the DPP 2013, DPP 2016 was released based on recommendations from the Dhirendra Singh committee. This version emphasised indigenously designed, developed, and manufactured weapon systems. However, it faced numerous issues like lack of transparency, leading to the Rafale scam, inconvenient offset regulations, etc.
Objective of the DAP 2020
The primary intention behind the DAP is to transform India into a global manufacturing hub. It aligns with the Government’s vision of Atmanirbhar Bharat, intending to empower the domestic industry through the Make in India initiative.
Salient Features of DAP 2020
DAP 2020 has introduced several key changes for ease of conducting business, including a time-bound defence procurement process and faster decision-making. This has been made possible by establishing a Project Management Unit to aid contract management and streamline the acquisition process.
Revised Offset Guidelines
Under the revised guidelines, preference will be given to manufacturing complete defence products over components. Several multipliers have been added to incentivise offsets. Notably, there will no longer be an offset clause in government-to-government, single vendor, and Intergovernmental Agreements (IGA).
Rationalization of Procedures for Trials and Testing
The scope of trials has been limited to evaluating core operational parameters.
Promotion of Indigenous Manufacturing
DAP 2020 also aims to develop India into a Global Manufacturing Hub by encouraging Foreign Direct Investment (FDI) in Defence Manufacturing. A new category ‘Buy (Global – Manufacture in India)’ has been included to encourage foreign companies to set up manufacturing through their subsidiaries in India.
Boosting Make in India and Atmanirbhar Bharat initiatives
Some categories have been exclusively reserved for Indian vendors, promoting domestic industry. The MoD will also notify a list of weapons/platforms banned for import to boost local manufacturing. Steps have also been taken to indigenise imported spare parts.
Improving Indigenous Content (IC)
The DAP 2020 seeks to improve the IC in all categories, including products like software.
Cost Cutting Measures
The DAP 2020 introduces leasing as a new category for acquisition, reducing the requirement for huge capital investment.
Other Related Initiatives
Alongside DAP 2020, several other initiatives have been taken, including the Draft Defence Production and Export Promotion Policy 2020 (DPEPP 2020). Also, the Innovations for Defence Excellence (iDEX) has been operationalised to provide necessary support to startups in the defence sector.
Way Forward
Self-reliance in defence manufacturing is a critical aspect of maintaining national sovereignty and achieving military superiority. The DAP 2020 not only protects the interests of domestic manufacturers by promoting indigenisation of technology but also encourages foreign investment. With key geostrategic challenges, India needs to carry out the much-needed defence reforms, and DAP 2020 is one of the many required defence reforms.
