DPP 2016 intends to promote self-reliance in defence

Defence Procurement Procedure (DPP) 2016, which is under final stages of completion, to bring in effective measures to promote indigenization in defence The Dollar Business Bureau

Defence Ministry is also coming up with a futuristic defence offset policy, which is in the ‘draft stage’

To bring down reliance on imports in the defence sector, Ministry of Defence is coming up with a new Defence Procurement Procedure (DPP) 2016, which is currently being finalised. An official information in this regard was given by the Defence Minister Manohar Parrikar in Lok Sabha on Friday. “The new DPP will bring into effect measures to promote indigenization and self-reliance in defence. Enabling provisions for utilization and consolidation of Design, Development and Manufacturing infrastructure available in the country are included in the proposal,” said the Minister, according to an official release. The Defence Ministry is also coming up with a futuristic defence offset policy, which is in the ‘draft stage’. In this regard, the Defence Acquisition Council (DAC) has also approved a set of amendments for offset provisions in order to simplify defence offset processes. The new draft offset guidelines lay focus on targeted offsets by ensuring flexibility for vendors to realise expected outcome at the time of ‘Request for Proposal (RFP)’ itself. Targets under new offset guidelines include development of a new ecosystem in defence manufacturing and infrastructure for skill development and Transfer of Technology. According to the Ministry data, DPP has approved a total of 66 capital procurement cases at an estimated cost of Rs.1.98 lakh crore. While 47 capital procurement contracts worth Rs.64,859.52 crore were approved in 2014-15, 44 such contracts worth Rs.39,955.36 crore were given approval during 2015-16. However, procurement of defence items from Indian sources witnessed decline in FY 2014-15 compared to FY 2013-14. While the Indian Armed Forces procured items worth Rs.49,531 crore in 2014-15, Rs.55,104 crore was the worth of items procured during 2013-14. In this regard, government proposes to promote domestic manufacturing by way of various policy initiatives which include: Preference to Buy and Make (Indian) over Buy & Make (Global) under DPP, 49% FDI through automatic route to ease access to start-of-art technology in the country, liberalization of industrial licensing for Indian manufacturing, among others. Efforts are also on for capacity creation to private players on a long-term basis with infrastructure levels standing above the levels of Public Sector Units (PSUs). A special task force was also constituted to lay down criteria for selection of private players as ‘Strategic Indian Defence Partners’.

March 12, 2016 | 02:10pm IST

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The Dollar Business Bureau - Mar 12, 2016 08:36 IST

DPP 2016 intends to promote self-reliance in defence

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