The Centre had set up a high-level panel in June, under the Director General (Acquisition) and advised by former bureaucrat Apurva Chandra, to review the Defence Acquisition Procedure 2020. It was tasked with developing a faster DAP 2025 to meet operational requirements towards modernisation of the armed forces in a timely manner and also to align acquisition procedures with current policies to achieve Aatmanirbharta and Make in India goals.
ET gathers that the committee has conducted rounds of deliberations on the same and a first draft of its recommendations has been prepared. It is learnt that one of the most significant recommendations made by the panel is regarding the IC requirement across the five categories for defence acquisition, as identified in DAP 2020.
The DAP 2020 seeks that in the top priority category – Buy Indigenously-Designed, Developed, and Manufactured (IDDM), there must be over 50% IC. In case of the second category – Buy (Indian), it places a requirement of IC at 50% to 60%, 50% for Buy (global manufacturer in India) category, 50% IC in ‘Make’ portion for ‘Buy and Make’ (Indian) category and over 30% for Indian vendor in case of ‘Buy Global’ category.
The Centre is considering converting this upfront IC requirement to a phased/graded one instead, spread over a specified number of years so that it does not become a “barrier”. For instance, in the IDDM category which has over 50% IC requirement, the first year may allow a vendor with 30% IC which will increase over the next 2-3 years to 40% and finally meet the 50% requirement.
This graded approach, it is felt, will allow more elbow room and time to indigenous partners to develop capacity.
The next big shift suggested, especially to encourage domestic Indian innovation and R&D, is to allow Indian entities on single vendor mode. This special mode, however, will be limited to specialised lower cost equipment/material/technology of urgent requirement to the services but of no more than Rs 100 crore value, it is proposed. The procured items may be allowed for immediate use by armed forces who require them, much like on a pilot basis. The same will cut down procedural delays significantly and also meet the needs of the forces faster, it is assessed.If the single vendor supplied equipment, say night vision goggles, smaller drones, etc, passes field testing and other specified metrics over the next 5-6 years, the said equipment may be put on a fast-track procurement regime for larger orders. The idea is to ensure timely access to necessary technology to the armed services, cost effective import substitution where possible and alongside also boost the indigenous manufacturing capabilities.
It is further proposed that the Buyer Nominated Equipment (BNE) – sub-systems that feed into larger in-service equipment – also be considered for IC, especially in keeping with import-substitution goals.
The panel is also learnt to have pitched that if components of a larger main equipment have been developed in India but are processed abroad and then come back to India as part of new acquisitions, they should also be considered as IC and given the benefit of IC. To ensure that only serious and manufacturing/technology-ready vendors bid for procurements, the panel is learnt to have suggested that a clear cut vendor qualification framework be built alongside the DAP 2025. The reason being that several procurement tenders have got held up in the past due to increased procedural work amid multiple vendors and ensuing litigation over disqualifications.
The first draft of the review panel has further suggested that iDEX (Innovations for Defence Excellence) like collaborations and joint ventures be encouraged to boost advanced tech solutions as many indigenous manufacturers may have the technical know-how but not adequate financial capital or manufacturing capabilities. The defence licence in such a scenario will be given to the manufacturing partner. However, the collaboration is expected to strengthen and guide indigenous capabilities as well.
The panel is also learnt to have suggested that incentives be brought in to encourage technology transfer development of capabilities in semiconductors, new materials and new technologies.
