Defence council set to list purchase rules

Ajay Banerjee

Tribune News Service

New Delhi, January 10

Almost 20 months into its tenure, the Narendra Modi-led National Democratic Alliance government is set to change the all-important defence procurement procedure (DPP), the policy document for defence equipment purchases, local production and imports.

The amendments to the DPP-2013 are on the agenda of the Defence Acquisition Council (DAC) slated to meet in New Delhi on January 12, sources told The Tribune. Headed by Defence Minister Manohar Parrikar, the DAC is the apex decision making body on defence matters and its decision will need ratification from the Cabinet Committee on Security. The new DPP is likely to incorporate most recommendations made by the Dhirendra Singh-headed panel of experts, which gave its report in July. It will lay down benchmarks for selection of private strategic partners from among Indian or foreign firms.

The strategic partners are mandated to undertake design and development projects under the “Make in India” procedure. These firms will tie up with Indian private or public sector companies for making top-of-the-line military equipment.

The new procedure will address policy issues to attract investment, build local confidence and allow indigenous manufacturing. The DPP is likely to disallow any bans against equipment for misdeeds of company employees; will seek to appoint an ombudsman to remove subjectivity in deals and have a panel of experts on cost negotiations to prevent delays.

The DPP may set in clause to have the Comptroller and Auditor General (CAG) to do pre-audit of deals rather than raise objections later.

It will increase the level of indigenisation and the method of calculating the local content in each defence equipment and lay down the indigenous threshold for categories “buy Indian” and “buy & make Indian” at 40 per cent and 60 per cent, respectively.

A lower local content threshold could be considered by the DAC, based on technology and its availability. Globally, India is the largest buyer of weapons and military equipment, accounting for 15 per cent of all such international imports, said a report by Sweden-based think-tank Stockholm International Peace Research Institute in March. The DPP will also address the issue of banning firms. The misdeeds of an entity or its employees may not have any bearing on the equipment or system. This will ensure that the supply of equipment is not blocked in case a bribery charge emerges.