Rajnath Singh unveils new policy for faster acquisition of weapons

Singh also approved proposals for capital acquisitions of various defence equipment

Defence Minister Rajnath Singh releases the New Defence Acquisition Procedure (DAP) at the Defence Acquisition Council (DAC) meeting | PTI Defence Minister Rajnath Singh releases the New Defence Acquisition Procedure (DAP) at the Defence Acquisition Council (DAC) meeting | PTI

With the aim of turning India into a global manufacturing hub, Defence Minister Rajnath Singh on Monday unveiled the Defence Acquisition Procedure (DAP) – 2020. The new policy aims to make the defence acquisition simpler and faster, and greater ease of doing business, while promoting the indigenous defence industry, MSMEs and startups.

Besides, announcing the new acquisition policy, Rajnath Singh headed the Defence Acquisition Council, the highest body on military purchases in the ministry of defence, and also approved proposals for capital acquisitions of various equipment required by the Indian armed forces at an approximate cost of Rs 2,290 crore.

It includes approval to equip the frontline troops of the Army with 72,000 SIG SAUER Assault Rifles at an approximate cost of Rs 780 crore from the United States. The purchase of assault rifles has become significant as Indian and Chinese troops are locked in an eyeball-to-eyeball situation on Ladakh border for the last four months and these rifles will be sent to troops deployed in the high altitude areas including the Line of Actual Control (LAC), the de-facto border with China.

Aligned with Prime Minister Narendra Modi's vision of Atmanirbhar Bharat and empowering the Indian domestic industry through Make in India initiative, the new policy has included the 'leasing' option, to enable operating of assets without owning thereby, and substitute huge initial capital outlays.

Calling it significant, defence ministry officials claimed that by the provision to lease equipment like transport aircraft, trainers and simulators that do not have a direct combat role, it will substitute huge initial capital outlays with periodical rental payments.

The Formulation of DAP 2020 has been done after incorporating comments and suggestions from a wide spectrum of stakeholders, which will be applicable with effect from October 1, 2020.

While unveiling the new acquisition policy, Rajnath Singh says "With the new Foreign Direct Investment policy announced, the DAP 2020 has adequately included provisions to encourage FDI to establish manufacturing hubs both for import substitution and exports while protecting the interests of Indian domestic industry".

The categories of Buy (Indian-IDDM), Make I, Make II, Production Agency in Design & Development, OFB and Defence PSU and Strategic Partnership model will be exclusively reserved for Indian vendors meeting the criteria of ownership and control by resident Indian citizens.

"A new procedure has been included as a new chapter in DAP and structured as an enabling provision for services to procure essential items through Capital Budget under a simplified procedure in a time bound manner," Singh added.

The offset guidelines have also 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.

Last week, in its report tabled in Parliament, the Comptroller Auditor General of India has came out strongly against offset policy. The CAG accused several vendors of misusing the offset policy including manufacturer of Rafale fighter jets M/s Dassault Aviation. 

DAP also talks about “realistic” setting of General Staff Qualitative Requirements (GSQR) of weapons/platforms and overhauling of trial and testing procedure. It states that the process of formulation of SQRs has been further refined with greater emphasis on identifying verifiable parameters based on analysis of ‘comparative’ equipment available in the World and Domestic markets.

While raising the FDI limit in defence production to 74 per cent from 49 per cent, Union Finance Minister Nirmala Sitharaman in May had mentioned realistic setting of GSQR as part of reforms in the defence sector to boost self-reliance.

DAP 2020 also 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. 

It also stated to implement the ‘Ease of Doing Business’ with emphasis on simplification, delegation and making the process industry friendly.

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