Defence Acquisition Procedure-2020
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Raksha Mantri Shri Rajnath Singh has unveiled the ‘Defence Acquisition Procedure (DAP) – 2020’.
- The first Defence Procurement Procedure (DPP) was promulgated in the year 2002 and has since been revised periodically to provide impetus to the growing domestic industry and achieve enhanced self reliance in defence manufacturing.
- Raksha Mantri had approved constitution of Main Review Committee under Chairmanship of DG (Acquisition) Shri Apurva Chandra in August 2019 for preparation of DAP-2020.
- DAP 2020 will be applicable with effect from 01 October 2020.
Salient features of DAP-2020
- With the new Foreign Direct Investment policy announced, DAP 2020 has adequately included provisions to encourage FDI to establish manufacturing hubs both for import substitution and exports while protecting interests of Indian domestic industry. Specific reforms enunciated in Atmanirbhar Bharat Abhiyan, have been incorporated as under –
- Notify a List of Weapons/Platforms for Ban on Import – Relevant incorporation has been done in the DAP to ensure that NO equipment is procured ex import post timelines notified.
- Indigenisation of Imported Spares.
- Request For Information – RFI stage will explore willingness of the prospective foreign vendors to progressively undertake manufacture and setup an indigenous eco system at the spares/sub component level.
- New Category of Buy (Global – Manufacture in India) – The new category incorporates ‘manufacture of either the entire/part of the equipment or spares/assemblies/sub-assemblies/Maintenance, Repair and Overhaul (MRO) facility for the equipment, through its subsidiary in India.
- Co-production through Inter-Governmental Agreement (IGA) – This enables establishment of co-production facilities through IGA achieving ‘Import Substitution’ and reduce Life Cycle Cost.
- Contractual Enablement – Buyer’s Right to optimise Life Cycle Support costs and system enhancements through indigenous eco system incorporated.
- FDI in Defence Manufacturing – With the announcement of new FDI Policy, suitable provisions have been incorporated like new category ‘Buy (Global – Manufacture in India)’ done to encourage foreign OEMs to setup ‘manufacturing/maintenance entities’ through its subsidiary in India while enabling requisite protections to domestic industry.
- Time Bound Defence Procurement Process and Faster Decision Making – As part of the Defence Reforms announced in the Atmanirbhar Abhiyan, setting up of a PMU has been mandated to support contract management. The PMU will facilitate obtaining advisory and consultancy support in specified areas to streamline Acquisition process. Other issues included in these reforms are:-
- Simplification of Trial Procedures – DAP 2020 emphasises the need to conduct trials with an objective to nurture competition based on the principles of transparency, fairness and equal opportunities to all and not as a process of elimination.
- Ease of Doing Business – One of the key focus areas of the review was to implement ‘Ease of Doing Business’ with emphasis on simplification, delegation and making the process industry friendly with certain specific provisions.
- Reservation in Categories for Indian Vendors – The categories of Buy(Indian-IDDM), Make I, Make II, Production Agency in Design &Development, OFB/DPSU and SP model will be exclusively reserved for Indian Vendors meeting the criteria of Ownership and Control by resident Indian Citizens with FDI not more than 49%. This reservation will provide exclusivity in participation to domestic Indian industry.
- Enhancement of Indigenous Content
- Offsets – The Offset guidelines have been revised, wherein preference will be given to manufacture of complete defence products over components and various multipliers have been added to give incentivisation in discharge of Offsets.