30 March 2021

India issues draft rules for ‘revenue procurements'

by Jon Grevatt

The Indian Ministry of Defence (MoD) has published a draft version of new rules governing ‘revenue procurements’: the acquisition of equipment and services that sustain the Indian armed forces.

A draft version of the rules – known collectively as the Defence Procurement Manual (DPM) – was issued on 25 March, with the MoD requesting stakeholder feedback by mid-April.

India has issued a new Defence Procurement Manual for ‘revenue procurement’ requirements (Getty Images)

The new rules will replace the existing DPM, which was introduced in 2009, and are designed to be implemented alongside guidelines for ‘capital acquisitions’, which were launched last year and are known as the Defence Acquisition Procedure (DAP).

In the new DPM, Indian defence minister Rajnath Singh said in its foreword that the revision of revenue procurement guidelines is required to address issues including “transparency, accountability, and clarity”.

He said the DPM is aligned with growing Indian requirements for self-reliance, accelerated modernisation, competition in contracting, and locally sourced defence equipment and services.

The new DPM comprises Volume I and II (and consists of more than 240 pages) and features clauses and methods, as well as appendices and forms respectively. The manual details 15 “broad stages” in processing revenue procurements, from “acceptance of necessity” requirements to contract signing.

It also introduces new methods of revenue procurements including ‘Capex’ and ‘Opex’ models for capital and operational purchases. These outline the possibilities for the “straightway purchase goods followed by procurement of consumables” and the seller “taking back the goods after useful/contracted life” respectively.

The draft DMP also puts heavy reliance on use of ‘e-procurement’ methods to engage with contractors and increases its emphasis on supporting procurements from domestic micro, small, and medium-sized enterprises (MSMEs).

The Indian Ministry of Defence (MoD) has published a draft version of new rules governing ‘revenue p...

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