29 July 2020

India issues new draft policy for military acquisitions

by Jon Grevatt

The Indian Ministry of Defence (MoD) has released a second draft of proposed new defence procurement guidelines, with a view to unveiling the formal policy later this year.

The MoD said on 28 July that the guidelines – previously known as the Defence Procurement Procedure (DPP) 2020 – have been renamed as the Defence Acquisition Procedure (DAP) 2020.

India has issued a second draft of defence acquisition guidelines. The policy is regarded by the MoD as a key tool in incentivising the localised production of components for platforms such as the Tejas Light Combat Aircraft. (Janes/Patrick Allen)

The first draft of the procurement policy was issued by the MoD in March, with a request for stakeholder feedback on the guidelines by May. The amended second draft requests stakeholders to submit comments and suggestions by 10 August.

The second draft can be accessed here: https://pib.gov.in/Pressreleaseshare.aspx?PRID=1641774.

The MoD said the new draft was amended by a defence procurement review committee in response to observations made by stakeholders on the first draft, which it said ran to “more than 10,000 pages of comments”, and also government reforms announced in May intended to spur self-reliance in the face of supply-chain obstacles highlighted by Covid-19.

These new reforms included a decision to increase the cap on foreign direct investment (FDI) in defence from 49% to 76%, and to introduce a new list ‘banning’ the import of unspecified types of defence equipment.

The new draft policy makes no mention of the FDI cap, but it does point to new requirements banning the import of certain types of defence equipment.

The Indian Ministry of Defence (MoD) has released a second draft of proposed new defence procurement...

Jane's Find unrivaled intelligence, consultancy and advertising solutions to the defence and national security sectors.