New defence procurement procedure in early 2013 - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Thursday 1 November 2012

New defence procurement procedure in early 2013

By Ajai Shukla
Business Standard, 2nd Nov 12

A top defence ministry (MoD) official today revealed that the Defence Procurement Procedure of 2011 (DPP-2011), which governs the procurement of military weapons and equipment would be modified in early 2013.

“The Defence Procurement Policy is undergoing changes; and the 2013 edition of the DPP will come out early next year,” said Air Marshal M Matheswaran, the Deputy Chief of the Integrated Defence Staff (IDS), addressing a KPMG-organised defence industry gathering in New Delhi.

He said that the new DPP would liberalise defence procurement further. This conformed to industry expectations, as it has been the trend in successive modifications to the DPP in 2005, 2006, 2008 and the currently valid DPP-2011.

Matheswaran urged private industry to focus less on the high value, high technology weapons platforms (e.g. aircraft and tanks) on which the big defence money is spent. Instead, suggested Matheswaran, private industry should emulate the auto parts industry by setting up manufacturing units that were part of a global supply chain. These small units would form the backbone of a countrywide defence industrial base.

In the MoD’s planning, such a defence industrial backbone is crucial for maintaining, repairing, overhauling and upgrading the complex defence platforms that are currently being bought overseas and manufactured under licence in India.

“Rather than focusing on large weapons systems integration and manufacture as the only way, I think we need to break down the supply chain into many component parts, so that you become part of a global supply chain. If you look only at the Indian military as the only source of your order book, then you’re not going to have continuous orders for any length of time,” said Matheswaran.

The IDS deputy chief urged industry to develop small and medium enterprises (SMEs), which would produce the components that would go into larger and more complex system that would eventually be built by large conglomerates like the Tatas, L&T and the Mahindras.

Highlighting the “enormous” opportunities for private industry, Matheswaran pointed out the scope for India’s capital expenditure to grow from its current Rs 80,000 crore. “Our defence budget is still much less than the global average of three per cent of GDP. We haven’t exceeded even two per cent of GDP,” he said.


  1. China's second stealth fighter has made its first test flight... Thursday... J-31 unveiled by China in less than two years... flew for 11 minutes on Wednesday morning...

  2. Sir, what are ur views w.r.t PRC's SAC J-31/FC-60's first flight? Will it force MoD and DRDO to speed up the R&D on AMCA? We still think it can be achieved with full efforts by pvt. Sector and various institutions such as IITs/NITs..

  3. indian defence product maker have loose gays its only dependent every country who make def.item shame- dub dub very lough so bad in u tube i saw turky armed vehicle Otokar Arma 8*8 very simple design who make TATA OR TAMPO cumpany but decigion make rai ka pahar for FICV singapur have verity of armed vehicle kya 2050 he mi india koi succes product bana payaga,ik normal sa rifle tak nahi ban pa raha aur bat SUPER POWER KI HA HA HA

  4. 2005... 2006... 2008... 2011... 2013... When will we get it... Right... Keep Trying... Keep Trying... Keep Trying... till we succeed... hum honge kamiyab... ho ho... mahn mien...

  5. It is high time India looked at reorganizing the Defence Research / Development / Production Sector. DRDO cannot be the sole agency doing research and development as this is not healthy and it is proven that competition leads to better results. DRDO has to become a controlling and program management agency and manage the research and development of defense equipment based on competition between private and public sector.

  6. you havn't provided... stats of offsets... target... achived... actual... based on dpp... 2005... 2006... 2008... 2011... 2013... till date... then only we public... hav some sense of these policy... upgrades/downgrades...

  7. Why do people write like imbeciles?

  8. I think this is flip flop. Till recently big indigenous manufacturing companies were led to believe by the MOD that should build fast infantry combat vehicles, ships and assemble helicopters and warships and so on. Now they want them to become Tier-2 or Tier-3 suppliers to global companies. MOD is not allowing FDI . I think this all that the MOD can do is to write out policy every year which in no way kick start meaningful defence production here.


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