Defence Minister launches draft of Defence Procurement Procedure, 2020

On March 20, 2020, the Defence Minister Shri Rajnath Singh launched the draft of new Defence Procurement Procedure. The new procedure aims to increase the indigenous manufacturing.

Highlights

The new procedure aims to increase Indigenous Content ratio. The ratio is the percentage of content of the defence equipment built in India. For instance, the Indigenous Content Ratio of Light Combat Aircraft Tejas is 75.5%.

The procedure also incentivizes raw materials like special alloys and software.

Buy Global

The procedure has introduced “Buy Global” category. Under this category, only minimum necessary is to be bought from abroad.

Key Features of DPP, 2020

The new procedure has introduced Leasing as a new category. This is to replace huge initial payments with periodical rental payments. A new system has been introduced for software procurement. This is because, software gets updated at faster rates out of all other technologies.

What is Defence Procurement Procedure?

The Defence Procurement Procedure is the process that is followed to simplify procurement of defence equipment.

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