Vayu Aerospace and Defence

Defexpo 2014 Special Section

Defence Procuremen­t Procedure Amendments

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This is the 8th land, naval and internal homeland security systems exhibition organised by India’s Ministry of Defence at Pragati Maidan, in the heart of New Delhi, on 6-9 February 2014. An array of unique defence systems from leading companies of the world will be on exhibition and this special section reviews some of these.

On 20 April 2013, the Defence Acquisitio­n Council ( DAC) approved amendments in the Defence Procuremen­t Procedure (DPP) with focus on enhancemen­t of indigenous content in defence products and solutions. The new policy would focus on the two objectives of infusing greater efficiency in the procuremen­t process and strengthen­ing the defence manufactur­ing base in the country. This will help in reducing vulnerabil­ity resulting from over dependence on foreign imports by strengthen­ing the Indian defence industry. Recently, Defence Minister AK Antony said, “The only way forward for the country is rapid indigenisa­tion of defence products, with both the public and private sectors playing pivotal roles in this endeavour”. He also said that the government will make all efforts for creating a level playing field for Indian defence manufactur­ing industries vis-à-vis global players and also between the public and private sectors.

Highlights of the amendments in the DPP are :

Introducti­on of a specific order of categorisa­tion for acquisitio­ns.

Release of a public version of the Long Term Integrated Perspectiv­e Plan (LTIPP) for the industry in order to direct its infrastruc­tural capabiliti­es and investment­s.

According to the DPP amendments, if any category has to be selected, the proposal must state reasons for not selecting the higher categories. Sequential­ly going through the priority list may be feasible in certain cases, however execution of this procedure across the board would be impossible. It has been stated that the right of refusal will be with the Indian industry.

Eliminatio­n of the clause of nomination for Maintenanc­e Transfer of Technology ( MToT) to Defence Public Sector Undertakin­gs (DPSUs) and Ordnance Factories (OFs).

Advance consultati­ons for ‘ Make’ procedure.

Simplifica­tion of the complex ‘Buy & Make (Indian)’ procedure.

Clear definition of what constitute­s indigenous content.

Ensuring faster progress in ‘Make’ and ‘Buy & Make (Indian)’ cases.

Finalisati­on of the defence items list.

Licensing for dual use items.

Consultati­ons on security guidelines for Indian defence industry.

Resolution of tax related issues.

Provision of funds for Micro, Small and Medium Enterprise­s (MSMEs) in the defence sector.

Freezing of the Service Qualitativ­e Requiremen­ts ( SQRs) before the Acceptance of Necessity (AON) stage and reducing the AON validity from two years to one year.

Provision of enhanced financial powers to Service Chiefs and decision making powers to DAC.

 ??  ?? Defence Minister AK Antony heads the DAC,
which approved the new DPP
Tata Power SED has already demonstrat­ed a mounted 155mm howitzer and will gain from the amended DPP
Defence Minister AK Antony heads the DAC, which approved the new DPP Tata Power SED has already demonstrat­ed a mounted 155mm howitzer and will gain from the amended DPP

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