Defence Ministry Revises Procurement Rules to Boost Domestic Industry
The Ministry of Defence has approved a new Defence Procurement Manual aimed at bolstering self-reliance ('aatmanirbharta') in the sector. The revised rules will expedite the procurement of ammunition, spares, and other supplies for the armed forces, with a budget of ₹1,00,000 crore. Key changes include removing the need for a 'no objection certificate' from defence PSUs for open bidding, allowing private firms to compete for contracts previously dominated by public sector companies, and providing technical support to new domestic manufacturers.
Unpacked:
The manual was updated to address evolving requirements in modern warfare, streamline procurement processes, reduce bureaucratic delays, and promote self-reliance by expanding private sector and domestic industry participation. The last major revision was in 2009, and the new manual reflects changes in the defence landscape and the need for faster, more transparent acquisitions.
Eliminating the need for a 'no objection certificate' from defence PSUs enables private firms to compete directly in open bidding, previously a barrier that allowed PSUs to block contracts. This change is expected to foster a more level playing field, increase competition, and potentially improve efficiency and innovation in defence procurement.
The reforms should result in faster acquisitions, improved operational readiness, and reduced downtime for critical equipment. Indian industry, especially private firms, MSMEs, and start-ups, will gain more opportunities through guaranteed orders, relaxed penalties, and increased R&D support, boosting domestic manufacturing and innovation.
The manual introduces a dedicated chapter to promote innovation and indigenisation, encouraging collaboration with academic and research institutions like IITs, IISc, and universities. This is designed to foster R&D in critical defence technologies, reduce import dependence, and support indigenous capability development.