Defence Minister Raj Nath Singh approves new DRDO Procurement Manual 2020

On October 20, 2020, the Defence Minister Rajnath Singh approved a new Defence Research Development Organization Procurement Manual, 2020. The main objective of release of the manual is to encourage MSME (Micro Small and Medium Enterprises) in Research and Development.

Highlights

The manual will simplify processes of procurement and will therefore, facilitate indigenous defence industry. It will ensure the participation in design and development activities. Also, the new manual will increase the participation of private industries and start ups that are in sync with MSME enterprises in defence research.

The previous revision of the procurement manual of DRSO was carried out in 2016.

About Defence Procurement Manual 2020

It will facilitate faster execution of Research and Development in defence sector. The threshold limit for advance payment has been increased. The performance security and bid security up to Rs 10 lakhs has been exempted. This has been introduced to conceal price discovery of market forces.

President role

As the supreme commander of the Indian Defence Forces, the president of India has to approve the Defence Procurement Manual. It is produced by the Ministry of Defence and submitted to the President for his approval.

Significance

Currently, India requires the new manual as the Government of India is focusing to increase its defence production to 25 billion USD by 2025. Also, in the next five years, GoI has plans to spend around 130 billion USD in defence sector.

Background

India is one of the top three importers of defence goods in the world. In order to reduce foreign dependence in defence sector, the GoI has been introducing several measures. The Foreign Direct Investment limit was increased from 49% to 74% under automatic route. A negative list of weapons that will not be allowed to be imported was introduced.

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