India sees growth in online defence procurement

India is seeing strong growth in the use of online procurement practices in the defence sector, a senior official in the Ministry of Defence (MoD) in New Delhi has revealed.

Ajay Kumar, defence secretary in the MoD’s Department of Defence, wrote in a recent tweet that “defence services and organisations” in India have increased the use of online procurement methods by 72% in the fiscal year 2020–21 compared with 2019–20.

Such online methods are provided by the portal ‘Government eMarketplace’, which was launched in 2016 as a means to support public procurement activity led by government ministries and related state-owned public sector undertakings (PSUs).

Data provided by Kumar in his tweet shows that the MoD has expanded its use of the Government eMarketplace significantly since the portal was launched.

In 2016–17 the value of contracts that progressed through Government eMarketplace was just INR190 million (USD2.6 million), which increased to INR5.5 billion in 2017–18, and INR17.25 billion in 2018–19. In 2019–20 – up until 30 November 2019 – the value of contracts was INR14 billion, while the full-year total was INR28.1 billion.

In 2020–21 – until 30 November 2020 – the value of contracts to progress through the Government eMarketplace was INR24.25 billion, a year-on-year increase of 72%.

Government eMarketplace was formed to improve the speed, transparency, and cost-effectiveness of government procurement in India. It is also aimed at supporting small private-sector businesses in gaining access to public procurement contracts.

In defence, the portal is used mainly for tier-two and tier-three supplies in support of major production programmes undertaken by defence PSUs such as Hindustan Aeronautics Limited (HAL), Bharat Dynamics Limited (BDL), and Bharat Electronics Limited (BEL).