New DRDO Procurement Manual 2020 released by Defence Minister

The Defence Minister, Rajnath Singh, has released the new Defence Research Development Organization (DRDO) Procurement Manual, 2020 on October 20, 2020.  This has been released with an objective to encourage Micro Small and Medium Enterprises (MSME) to do Research and Development.

Defence Procurement Manual 2020

The manual would facilitate the faster execution of Research and Development in  the defence sector. Under the manual, the threshold limit for advance payment has been increased. However, the performance security and bid security up to Rs 10 lakhs has been exempted. The manual has been introduced in order to conceal the price discovery of market forces.

Significance

The manual would simplify the processes of procurement  and facilitate the indigenous defence industry. It will be ensuring the increased participation in design and development activities. The manual would also increase the participation of private industries and start ups in the defence sector which are in sync with the  MSME enterprises.

Who approves it?

The defence procurement manual is approved by the supreme commander of the Indian Defence Forces who is the President of India.  The Ministry of Defence submit the manual to the President for his approval.

Background

India is one among the top three importers of defence equipment’s in the world. To reduce the dependency on foreign companies, the GoI has been introducing several measures. In that line, the Foreign Direct Investment (FDI) limit was also increased from 49% to 74% under automatic route. Further, a negative list of weapons was created and these weapons will not be allowed to be imported.  To attain the aatma nirbharta in defence, India required the new manual. The Government of India is also focusing on increasing its defence production to 25 billion USD by 2025 .