Defence Procurement Policy 2016 cleared

Indian Defence Ministry has cleared the long anticipated Defence Procurement Policy of 2016 (DPP-2016). A new procurement class - termed Indian Designed, Developed and Manufactured (IDDM) category - has been created as the most preferred category for buying equipment to encourage Indian defence industry to shift from licensed manufacture into the high-tech realm of designing and developing defence equipment. To qualify for this category, at least 40% of a product would have to be manufactured in India. Further, in DPP-2016, the "Make" procedure will see the government reimbursing 90% of the development cost against the current 80%. The new DPP will also have provision for allowing the DAC to fast track the procedure by bypassing the Acceptance of Necessity (AoN) process, in urgent cases like requirements of the Special Forces. Also, Offset liabilities will now be placed on vendors only in contracts worth over Rs 2,000 Crores up from Rs 300 Crores earlier. The new policy would be accessible on the Defence Ministry's website with effect from March 28 and will replace the current DPP-2013, and govern all defence acquisitions initiated after April 2.

Source: http://www.business-standard.com/article/economy-policy/new-defence-procurement-policy-cleared-116032200058_1.html


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