Print Friendly, PDF & Email

Defence Procurement Policy, 2016 (DPP 2016)

  • The first defence procurement policy was unveiled in 2002.
  • The DPP 2016 will replace the Defence Procurement Procedure 2013 (DPP 2013) and came into force on 1 April 2016.
  • In DPP-2013, the acquisition of Weapon Systems and equipment for the Armed Forces flows from the Long Term Integrated Perspective Plan (LTIPP).
    • The current LTIPP spells out the capability desired to be achieved by the Armed Forces over 15 years duration (2012-27)
  • Background:

    • The DPP 2016 has been framed based on the recommendations of the Dhirendra Singh Committee that was appointed in May 2015 to review the DPP 2013.
    • Committee was tasked to eliminate bottleneck in defence procuremnt and to evolve a policy framework to facilitate Make in India in defence manufacturing in order to align the policy evolved with DPP-2013
  • Aim

    • ensure timely procurement of defence (military) equipment, systems, and platforms required by the armed forces through optimum utilization of allocated budgetary resources.
  • Coverage

    • cover all capital acquisitions undertaken by the Union Ministry of Defence, Defence Services and Indian Coast Guard (ICG) both from indigenous sources and import.
    • Capital Acquisitions Schemes  broadly classified into 3 categories
      1. Buy scheme:
      2.  Buy and Make scheme:
      3. Make category Scheme:
  • Buy scheme:

    • Outright purchase of equipment and procurements under this scheme are further categorized as Buy (Indian- IDDM), Buy (Indian), and Buy (Global).
    • Indigenously Designed Developed and Manufactured( IDDM)
      • Buy (India-IDDM) seeks to boost indigenous production and procurements. Under it 40% should be sourced locally in terms of the content.
  • Buy and Make scheme:

    • The procurement are categorized as Buy and Make and Buy and Make (Indian)
    • It will promote domestic manufacturing, including government funding R&D and recognition of the Micro, Small and Medium Enterprises (MSMEs) in technology development.
  • Make category Scheme:

    • It seeks developing long-term indigenous defence capabilities and procurements.
  • Procurement of defence equipment

    • preferred order of categorization, in decreasing order of preference, as indicated below
      1. Buy (India-IDDM).
      2. Buy (Indian).
      3. Buy and Make (Indian).
      4. Buy and Make.
      5. Buy (Global).
  • Impact

    • Categorization clearly marked a shift towards indigenous equipment.
    • The DPP, 2016 boosts India’s target of ‘Make in India’ policy.
    • It will enables the creation of major domestic defence industry to cater to its own needs as well as exports.
    • The policy will encourage local industry, by helping introduce top priority category called Indian Designed Developed and Manufacture (IDDM).
  • Further Reading