Defence Procurement Procedure modification: Expert panel submits recommendations to Parrikar

A high-level panel mandated to recommend changes in the way India buys defence weapons and equipment today submitted its report to Defence Minister Manohar Parrikar.

PTI| Last Updated: Jul 23, 2015, 22:18 PM IST

New Delhi: A high-level panel mandated to recommend changes in the way India buys defence weapons and equipment today submitted its report to Defence Minister Manohar Parrikar.

The Committee of Experts, under the chairmanship of former Home Secretary Dhirendra Singh, was set up for amendment to the Defence Procurement Procedure (DPP-2013) including formulation of a policy framework to facilitate 'Make in India' in defence manufacturing.

After interaction with various stakeholders including the industry, Singh presented the report to Parrikar this evening.

The 10-member committee has representatives from the Ministry as well as the industry.

There are around 12 areas which the committee went into, some of which pertain to exports, level playing field, agents and black listing policy.

The Ministry will now go through this report and bring in amendments to the DPP accordingly.

Some of the key issues that the Committee looked into was the appointment of legal or authorised agents by defence firms and the policy of blanket blacklisting.

The NDA government has opposed the policy of the previous UPA government under which a number of companies were blacklisted, a move which had severely hit the modernisation process of the armed forces.

At present, agents or representatives of different firms operate clandestinely since the legal position is unclear.

The government is also likely to bring key changes in the 'Offset policy' in the defence sector under which a company will have the option of migrating from the offset obligations to 'Buy and Make'.

Under the possible new provisions, value of the FDI by the Original Equipment Manufacturer (OEM) and the eligible products being manufactured in India will be counted against 'Offset obligations'.

Major recommendation of the committee includes framing of realistic Qualitative Requirements (QR) by the three services.

For pushing 'Make in India' initiative, it has suggested that besides the lowest bidder, the most indigenous should also be considered.

The Defence Procurement Procedure (DPP) was first drafted in 1992 and reviewed in 2002. It was then revised in 2003, 2005, 2006, 2008, 2011 and 2013.

Parrikar has earlier said that the new version will be shorter and simpler, besides being in line with the government's 'Make in India' initiative.

The minister has said he has decided to go for the jugular and "completely change" the concept of defence procurement.