Policy

New Defence Procurement Procedure delayed till Jan

Nayanima Basu New Delhi | Updated on January 22, 2018

VK Aatre

Defence Ministry awaiting report of task force on selection of strategic partners

The much-awaited Defence Procurement Procedure (DPP) 2015 is not going to be released before January, as the Ministry of Defence (MoD) is awaiting the report of a task force on the selection of strategic partners for defence projects.

“The task force report is expected by January 15. And its recommendations will be crucial for the DPP.

“So we can expect the new DPP to be out only by late January, once all the recommendations of the task force have been studied, analysed and appropriately inducted in the DPP,” a top official told BusinessLine.

The revised DPP, which lays down the norms for capital procurement of defence weapons and equipments, was initially expected to be released in May.

The task force, headed by VK Aatre, former scientific adviser to Defence Minister, has been entrusted with laying down rules for the selection of strategic partners in the private sector in long-term defence projects. This was constituted in September.

Make in India

It was set up in line with the recommendations on DPP 2015 made by the Dhirendra Singh committee.

The committee had recommended the creation of a strategic partnership model that will seek to create capacity within the private sector under the ‘Make in India’ scheme to manufacture aircrafts, helicopters, warships, submarines and missiles among others.

The task force will also prepare a draft agreement in which both the MoD and the private defence firm will be a party. Besides, it will prescribe a methodology for the selection of players by laying down specific parameters based on the selection criteria.

Raising indigenisation

On Monday, while launching a Make in India portal of the Department of Defence Production, Defence Minister Manohar Parrikar had said the DPP is almost final and that it will be approved by the Defence Acquisition Council by the end of this month or early next month.

He also said the MoD is targeting 40 per cent of defence procurement under the Make in India initiative, from the current 30 per cent.

It aims to raise indigenisation to 70 per cent in five years.

The average annual value of total procurement of defence items from Indian as well as foreign sources in the last three fiscals (FY13 to FY15) for the Army, Air force and Navy stood at ₹85,020 crore, of which about 62 per cent was sourced from domestic firms.

Published on December 22, 2015

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