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Rajnath Singh Unveiled DAP 2020 Final Document; Approved Capital Acquisition for Arms & Equipment worth Rs 2,290cr

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Defence-Acquisition-Council-headed-by-Raksha-Mantri-Shri-Rajnath-SinghOn September 28, 2020, the Defence Acquisition Council (DAC) meeting was held under the Chairmanship of Raksha Mantri (Union Defence Minister) Rajnath Singh in New Delhi during which Defence Acquisition Procedure (DAP)-2020 Document was released and approval for procurement of various equipment required by the Indian Armed Forces at an approximate cost of Rs 2,290 crore from Domestic Industry as well as Foreign vendors was also accorded.

Unveiling of Defence Acquisition Procedure (DAP)-2020 Document:

After the release of New Draft Defence Procurement Procedure 2020 in March 2020 (Read Here), the final form of DAP 2020, a renamed version of Defence Procurement Procedure (DPP), was unveiled by Defence Minister Rajnath Singh which has been prepared on the lines of Atmanirbhar Bharat to empower domestic industry with the ultimate aim of turning India into a global manufacturing hub. It will be applicable with effect from October 1, 2020 for a period of five years i.e. till 2025. This new version has 5 new chapters which are as follows:

  • Leasing: The major change in DAP 2020 is allowing the three forces to take military equipment, hardware and platforms like helicopters, simulators and transport planes on lease as per operational requirements as it could be a cheaper option than their procurement.
  • Procurement of information and communication technology (ICT) systems
  • Post-contract management
  • Acquisition of systems designed and developed by the Defence Research and Development Organisation (DRDO), the Ordnance Factory Board (OFB) and Defence Public Sector Undertakings (DPSBs)
  • Simplified capital expenditure procedure

Buy (Global – Manufacture in India) category for FDI:

With focus on FDI (Foreign Direct Investment) in defence manufacturing and indigenization of the manufacturing prices, a new category ‘Buy (Global – Manufacture in India)’ is introduced to encourage foreign original equipment manufacturers (OEMs) to setup manufacturing or maintenance entities through its subsidiary in India while enabling requisite protections to domestic industry.

Reserved categories for Indian vendors:

Buy (Indian- Indigenously Designed Developed and Manufactured), Make I, Make II, Production Agency in Design and Development, Ordnance Factory Board (OFB), Defence Public Sector Undertaking (DPSU) and Strategic partnership model are exclusively reserved for Indian Vendors.

  • Notable, to be eligible under the above categories, the Indian vendors will have to meet the criteria of ownership and control by resident Indian citizens with FDI not more than 49%.

Points to be noted:

In accordance with the Department of Defence Production (DDP), Ministry of Defence (MoD), India aims to export defence products worth Rs 15,000 crore in 2020-21. 

–Between April 1 and July 23, 2020 India exported defence equipment and platforms worth Rs 1,892 crore.

–In 2019-20 and 2018-19, India’s defence exports stood at Rs 9,115 crore and Rs 8,320 crore, respectively,

–The DAP 2020 also enables the notification of a List of Weapons or Platforms that will be banned for import.

–The policy also provides for a single-stage accord of AoN (Acceptance of Necessity) in all cases up to Rs 500 crore to cut delays in approval of acquisition proposals.

Background:

The first DPP was promulgated in 2002 and has since been revised periodically to achieve enhanced self reliance in defence manufacturing.  The DPP has been revised in 2005, 2006, 2008, 2009, 2011 and 2013.  In August 2019, Rajnath Singh constituted the Main Review Committee under Chairmanship of Director General (Acquisition), MoD Apurva Chandra for the finalization of draft DAP 2020.

Rajnath Singh approved Capital Acquisition for Arms & Equipment worth Rs 2,290cr along with SIG SAUER Assault Rifles

During the meeting, DAC approved the procurement of Static HF Tans-receiver sets and Smart Anti Airfield Weapon (SAAW) under the Buy Indian [IDDM (Indigenously Designed, Developed and Manufactured)] category. 

  • The HF radio sets will enable seamless communication for the field units of Army and Air Force and are being procured at an approx. cost of Rs. 540 crore. 
  • The SAAW being procured at an approx. cost of Rs. 970 crore will boost fire power of Navy and Airforce.

Apart from above, DAC also accorded approval for procurement of SIG SAUER Assault Rifles at a cost of approx. Rs.780 crore to equip the Frontline Troops of the Army.

Recent Related News:

i.On August 10, 2020, as a part of the Atma Nirbhar Week celebration (Atmanirbharta Saptah) between August 7- 14, 2020 of the Ministry of Defence (MoD) and to boost Atmanirbhar Bharat Abhiyan (self-reliant India movement), the Union Defence Minister Rajnath Singh virtually launched the initiatives for modernisation and upgradation of facilities at DPSUs and OFB.

ii.On August 13, 2020 Rajnath Singh launched the Naval Innovation and Indigenisation Organisation (NIIO) through an online webinar. NIIO establishes dedicated structures to enable end users to interact with academia and industry towards fostering innovation and indigenisation for self-reliance in defence in accordance with the vision of Atmanirbhar Bharat.

About Ministry of Defence:
Rajnath Singh constituency– Lucknow, Uttar Pradesh (UP)
Minister of State (MoS)– Shripad Yesso Naik