Defence Minister Rajnath Singh unveils Defence Acquisition Procedure, says DAP aligned with PM's vision of Atmanirbhar Bharat

Amid India-China border tension, Union Defence Minister Rajnath Singh on Monday unveiled the Defence Acquisition Procedure (DAP)--2020 in the national capital. The DAP 2020 will be applicable with effect from October 1.

Taking to micro-blogging site Twitter, Singh said that the DAP 2020 has been aligned with the Prime Minister Narendra Modi’s vision of Atmanirbhar Bharat and empowering the Indian domestic industry through Make in India initiative with the ultimate aim of turning India into a global manufacturing hub.

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He also said, "With the new Foreign Direct Investment policy announced, the DAP 2020 has adequately included provisions to encourage FDI to establish manufacturing hubs both for import substitution and exports while protecting the interests of Indian domestic industry."

"The categories of Buy(Indian-IDDM), Make I, Make II, Production Agency in Design & Development, OFB/DPSU and SP model will be exclusively reserved for Indian Vendors meeting the criteria of Ownership and Control by resident Indian citizens," Singh added.

"Happy to unveil the new Defence Acquisition Procedure (DAP)-2020 Document today. The Formulation of DAP 2020 has been done after  incorporating comments and suggestions from a wide spectrum of stakeholders," he tweeted.

The Defence Minister also said, "The Offset guidelines have also been revised, wherein preference will be given to manufacture of complete defence products over components and various multipliers have been added to give incentivisation in discharge of Offsets."

"A new procedure has been included as a new chapter in DAP and structured as an enabling provision for Services to procure essential items through Capital Budget under a simplified procedure in a time bound manner," he added.

The first Defence Procurement Procedure (DPP) was promulgated in the year 2002 and has since been revised periodically to provide impetus to the growing domestic industry and achieve enhanced self reliance in defence manufacturing. SIngh had approved constitution of Main Review Committee under Chairmanship of DG (Acquisition) Apurva Chandra in August 2019 for preparation of DAP-2020.

Specific reforms enunciated in Atmanirbhar Bharat Abhiyan, have been incorporated as under:-

(a) Notify a List of Weapons/Platforms for Ban on Import.  Relevant incorporation has been done in the DAP to ensure that NO equipment as mentioned in the list is procured ex import post timelines notified.

(b) Indigenisation of Imported Spares.   
(i) Request For Information. RFI stage will explore willingness of the prospective foreign vendors to progressively undertake manufacture and setup an indigenous eco system at the spares/sub component level.
(ii) New Category of Buy (Global – Manufacture in India).    The new category incorporates ‘manufacture of either the entire/part of the equipment or spares/assemblies/sub-assemblies/Maintenance, Repair and Overhaul (MRO) facility for the equipment, through its subsidiary in India.
(iii) Co-production through IGA.      This enables establishment of co-production facilities through IGA achieving ‘Import Substitution’ and reduce Life Cycle Cost.
(iv) Contractual Enablement.  Buyer’s Right to optimise Life Cycle Support costs and system enhancements through indigenous eco system incorporated.

(c) FDI in Defence Manufacturing.            With the announcement of new FDI Policy, suitable provisions have been incorporated like new category ‘Buy (Global – Manufacture in India)’ done to encourage foreign OEMs to setup ‘manufacturing/maintenance entities’ through its subsidiary in India while enabling requisite protections to domestic industry.

(d) Time Bound Defence Procurement Process and Faster Decision Making.  As part of the Defence Reforms announced in the Atmanirbhar Abhiyan, setting up of a PMU has been mandated to support contract management. The PMU will facilitate obtaining advisory and consultancy support in specified areas to streamline Acquisition process. Other issues included in these reforms are:-

(i) Realistic Setting of GSQRs of Weapons/Platforms.          The process of formulation of SQRs has been further refined with greater emphasis on identifying verifiable parameters based on analysis of ‘Comparative’ equipment available in the World and Domestic markets.

(ii) Simplification of Trial Procedures.     DAP 2020 emphasises the need to conduct trials with an objective to nurture competition based on the principles of transparency, fairness and equal opportunities to all and not as a process of elimination.