New Indian Defence Procurement Policy Shortly: Minister Parrikar

  • Our Bureau
  • 01:47 PM, March 1, 2016
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New Indian Defence Procurement Policy Shortly: Minister Parrikar
Indian Defense Minister Manohar Parrikar (File Photo)

India will soon roll out a new Defense Procurement Procedure (DPP) and will concentrate on promoting indigenization and self-reliance in defense through public and private sector.

The Indian defense minister, Manohar Parrikar in a statement to the parliament Tuesday said that the capital procurement of the defense equipment is carried out as per the current DPP-2013 which gives priority to indigenous design, development and manufacture of defense equipment based on higher preference to Indian vendors in procurement.

The Defense Acquisition Council (DAC) has approved major policy changes that include increased offset baseline, reduced delays in procedures and emphasis on local production in January this year.

According to the new DPP offsets obligations will be applicable in deals worth over 2,000 crore (US $294 million) increased from the earlier benchmark of over INR 300 crore (US $44 million).

The new DPP lays emphasis on reducing the delays in procurements by eliminating repetitive procedures. Certain procurements will be allowed in case of single vendor situations with proper justification. Earlier no tender was issued if there was only a single vendor bidding for any project.

"The representative (or agent) should be paid a reasonable fee...he should not be a commission agent or be paid depending on the cost of a deal or the success or failure of the deal," Defense Minister Manohar Parrikar had said.

The new DPP will also include guidelines for the government plan to enter into strategic partnerships with private sector companies in six critical areas, ranging from aircraft and warships to tanks and guided missile systems.

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 last year.

The DAC is still to take a call on decisions relating to blacklisting of companies and the report on strategic partnerships.

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