Defexpo 2014 Special Section
Defence Procurement Procedure Amendments
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.