Review of Indian Defence Procurement Policy

Indian Ministry of Defence, Government promulgated Defence Procurement Procedure (DPP- 2006) with effect from 1st September, 2006 to ensure expeditious procurement of the approved requirements of the Armed Forces in terms of capabilities sought and time frame prescribed. 
 
DPP-2006 provides for review of the procurement procedure after every two years in the light of the practical experience gained in its implementation. 
 
To encourage participation by Indian companies and strengthen the domestic technical/industrial base, Capital Acquisitions have been categorized in the Defence Procurement Procedure-2006 as under: 
 
– Acquisitions covered under the ‘Buy’ decision. Buy would mean an outright purchase of equipment. Based on the source of procurement, this category would be classified as ‘Buy (Indian)’ and ‘Buy (Global)’. ‘Indian’ would mean Indian vendors only and ‘Global’ would mean foreign as well as Indian vendors. ‘Buy Indian’ must have minimum 30% indigenous content if the systems are being integrated by an Indian vendor.  
 
– Acquisitions covered under the ‘Buy & Make’ decision would mean purchase from a foreign vendor followed by licensed production/indigenous manufacture in the country.  
 
– Acquisitions covered under the ‘Make’ decision would include high technology complex systems to be designed, development and produced indigenously. 
 
This information was given by the Defence Minister Shri A K Antony in a written reply to Shri Ramdas Agarwal in Rajya Sabha today.  
 
Review on Involvement of Middlemen In Defence Deals 
 
Defence Procurement Procedure (DPP) 2006 and Defence Procurement Manual (DPM 2006) under implementation with effect from 1st September 2006, provide for direct dealing with Original Equipment Manufacturers (OEMs) or Authorised Vendors or Government-sponsored Export Agencies (applicable in case of countries where domestic laws do not permit direct export by OEMs). 
 
Further, the procedures inter-alia incorporate provisions for penalties being imposed if any seller engages any individual or firm, whether Indian or foreign whatsoever, to intercede, facilitate or in any way recommend to the Government of India or any of its functionaries, whether officially or unofficially, to the award of Contract to the Seller. 
 
This information was given by the Defence Minister Shri A K Antony in a written reply to Shri Amar Singh and Shri Abu Asim Azmi in Rajya Sabha today.