Explanation On Defence Procurement Policy 2020

The proposed defence procurement policy 2020 (DPP), published by the Ministry of Defence (MoD), has received widespread attention. As part of its “Make in India” push, the new draught defence procurement policy 2020 alters current military procurement regulations to better align them with the government’s long-standing goals of increasing indigenous defence capacity while reducing dependence on imported defence equipment. According to the draft document, which is similar to its previous iteration in the DPP 2016, several substandard policies and notions continue to be promoted, which may impede India’s efforts at indigenisation compared to direct procurement, which is generally less expensive and more efficient. 

Defence Production in India

Between 2016 and 2020, the Indian defence manufacturing industry is expected to grow at a compound annual growth rate (CAGR) of 3.9 per cent. In its defence output objective for 2025, the Indian government has set a figure of US$ 25.00 billion (including US$ 5 billion in exports by 2025) for the country. India’s defence exports are expected to reach US$ 1.29 billion in 2019-20, according to estimates. The value of India’s defence imports was US$ 463 million in the fiscal year 2020 and is predicted to reach US$ 469.5 million in fiscal year 21. In the previous two years, the country’s defence exports have seen a significant rise. 

During the next five years, India expects to sell military weapons worth US$ 5 billion (about Rs. 35,000 crores part of efforts to improve the overall defence land management, the Department of Defense, in conjunction with the Directorate of Defense Enterprise and the Armed Forces, built a land management system (LMS) in November 2020. At Aero India 2021 in Bengaluru in February 2021, the Defence Research and Development Organization (DRDO) handed out Licensing Agreements for Technology Transfer (LAToT) for 14 DRDO created technology to a total of 20 enterprises. Among the proposals in the draft Defence procurement policy, 2020 are increased levels of local content, additional defence offsets multipliers, the creation of a procurement category specifically for leasing, and new alternatives for equipment sustainment activities. It makes an effort to improve upon the 2016 draught version of the document. According to the new defence procurement policy 2020, the goal is to develop indigenous design capability further while also increasing localisation. If done well, it may boost the role of domestic industry, particularly the private sector, in defence manufacturing. 

Innovations for Defence Excellence (iDEX)

Innovative solutions to empower the country’s defence and security are the focus of the Indian government’s “Innovations for Defence Excellence (iDEX)” initiative, which has provided a platform for start-ups to connect with defence establishments and develop new technologies/products in the next five years, according to the Indian government (2021-2026). 

In collaboration with partner incubators, iDEX has successfully enlisted the start-up community’s participation in the Defence India Start-up Challenge (DISC) initiative. The Defense Ministry has achieved 70 per cent self-reliance in armament by 2027, which would open up enormous opportunities for participants in the sector. Green Channel Status Policy (GCS) was implemented to promote and support private sector investments in defence production in India and increase the private sector’s role in the defence production industry. 

Defence Acquisition Procedure 2020

To begin with, the defence procurement policy 2020 has shortened the term for the Long-Term Integrated Perspective Plan (LTIPP), which has been cut from 15 years to 10 years. The document’s name has been changed to Integrated Capability Development Plan (ICDP) (ICDP). However, although the document does not mention the advantages of either shortening the time horizon or altering the document’s name, defence procurement policy 2020 is now tied to the five-year Defence Capability Development Plan (DCAP), the new name for the prior Services Capital Acquisition Plan (SCAP). Because of the relationship between the ICDP and the DCAP, the long-term plan document is anticipated to be treated with more respect than before, which was a grey area in the previous procurement handbook. 

In addition, the defence procurement policy 2020 has been updated to include a two-year roll-on Annual Acquisition Plan (AAP). In contrast to the DPP 2016, which includes two sections, each of which has two parts, the AAP of DAP 2020 has four sections, each of which has two parts.  

Conclusion

The Defence Acquisition Procedure 2020 was published in September 2020 by the Ministry of Defence (MoD) after extensive debates that lasted more than a year (DAP 2020). Prime Minister Narendra Modi’s government has launched its second attempt to streamline India’s defence procurement system and promote “Make in India” in the defence manufacturing industry with the 657-page Defence Procurement Procedure 2017 (DPP 2017). Defence Public Sector Undertakings, Ordnance Factories, and specific establishments under the Defence Research & Development Organization (DRDO) make up India’s vast defence industrial base, supplemented by a booming private sector.