Tribune News Service
New Delhi, March 20

In key changes suggested to the defence procurement procedure (DPP), the Ministry of Defence wants to lease non-essential equipment, allow rapid update of software on projects, have more local content and give incentives to foreign companies to manufacture in India.

Launching the draft DPP today, Defence Minister Rajnath Singh said, “Our aim is to make India self-reliant and a global manufacturing hub.”

The draft proposes increasing the indigenous content (IC) stipulated in various categories of procurement by about 10 per cent to support ‘Make in India’ and incentivising the use of local raw materials and special alloys.

The new DPP also has a new category to allow minimum 50 per cent indigenous content on cost basis of the total contract value. Only the minimum necessary will be bought from abroad, the rest will be manufactured in India.

This would be in preference to the ‘Buy Global’ category as manufacturing will happen in India and jobs created.

The DPP proposes to allow leasing as a new category for acquisition in addition to existing ‘Buy’ and ‘Make’ categories to substitute huge initial capital outlays with periodical rental payments.

Leasing will be allowed under two categories – from Indian company and also when a global entity is leasing equipment. A new chapter has been introduced for procurement of software and systems related projects.