DAC approves new Defence Procurement Policyhttps://indianexpress.com/article/business/business-others/dac-approves-new-defence-procurement-policy/

DAC approves new Defence Procurement Policy

The new policy (DPP) aims to create a strong defence manufacturing base in the country.

The new Defence Procurement Policy (DPP) with the twin objective of infusing greater efficiency in the procurement process and strengthening the defence manufacturing base in the country has got the stamp of approval by the apex decision making body in the MoD: Defence Acquisition Council (DAC).

The highlight of the new set of amendments seems to be defence minister shunning his discretionary powers of clearing the deviations in procurement processes and empowering the DAC to take a call in such cases.

At the DAC meeting chaired by defence minister AK Antony,he said,“the only way forward for the country is rapid indigenization of defence products,with both the public and the private sectors playing pivotal roles in this endeavour.”

According to officials of MoD the preference for indigenous procurement in the Defence Production Policy-2011 has now been made a part of DPP through an amendment that provides for a preferred order of categorisation,with global cases being a choice of last resort. And,any proposal to select a particular category must now state reasons for excluding the higher preferred category/categories.


DPP-2013 goes beyond the earlier DPPs of 2002,2005,2006,2008 and 2011 in backing indigenous defence industry. It stipulates that Indian defence companies will get access to the military’s long-term equipment road map,providing them with the time needed for developing the equipment that the military needs in the future; provides a level playing field between the defence public sector undertakings (DPSUs) and the private defence companies; simplifies the ‘buy & make (Indian)’ procedure to benefit Indian industry; and defines ambiguous terms in the DPP like ‘indigenous content’.

As reported earlier by FE,MoD has also granted a longstanding request by private defence companies for access to the military’s 15-year Long-Term Integrated Perspective Plan (LTIPP),so that they have the lead time needed to meet future equipment needs.

“DAC has approved the release of a public version of its 15-year perspective document (LTIPP),outlining the “Technology Perspective and Capability Road map” (TPCR) against LTIPP 2012-2027. The TPCR will provide useful guidance to the Indian defence industry for boosting its infrastructural capabilities and directing its R&D and technology investments.”

While Antony said the government will make all efforts to create genuine level playing field for Indian manufacturing industries vis-à-vis Global Players,experts like Deba R Mohanty,Chairman and CEO,INDICIA Research & Advisory,point out,“Most of the amendments to the DPP 2011 seem to be cosmetic changes from earlier provisions. Provisions like nomination facilities for state-owned enterprises,licensing and related provisions have only been tweaked in a manner which appears to make big impacts. Such measures actually may not bring in desirable results unless fundamentals of issues like usefulness of nomination facilities,bureaucratic complexities in licensing procedures,harmonizing export control items with international regimes like Wassenaar Arrangements,and related subjects are examined in-depth.”

Mohanty goes on to suggest,“There is a need to look at the larger picture. DPP’s mandate is limited in comparison to a much larger security production and procurement activities. While DPP only covers procurement for the armed forces,DPSUs,OFB and DRDO within the MoD follow separate procurement procedures. If one looks at the larger National Security Procurement landscape,which includes internal security forces,DPP’s mandate looks limited. Ideally,some thing like a National Security Procurement Procedure (NSPD) should be created to address issues of production and procurement for national security purposes.”