New defence procurement policy in April

The Government is set to roll out a new defence procurement policy (DPP) in April to make military purchases more transparent and iron out difficulties faced by vendors in meeting offset obligations. The new policy, which will build on the existing DPP 06, will be based on feedback from both Defence companies and the Defence Ministry’s procurement department.

“We would have a new policy by April. The intention is to make the process easier to comprehend. The offset policy will be finetuned and made transparent and easy to address,” said Secretary, Defence Production, Pradeep Kumar.

While Kumar did not share details, it is learnt that major changes are expected in the offset clause to make investing in the Indian industry easier. Under the offset clause, at least 30 per cent of all Defence deals worth over Rs 3,00 crore has to be invested in India’s Defence industry. A major grievance of foreign vendors has been that as the policy demands investments only in the Defence sector, it is difficult to find Indian partners. Plus, tough export rules of the country make it difficult to co-produce military equipment.