GOA, India — India announced a new weapons procurement policy March 28 at Defexpo India 2016, the ninth in the series of biennial Land, Naval and Internal Homeland Security Systems Exhibition, at Goa, India.
The weapons procurement policy, Defence Procurement Procedure (DPP) 2016 is a shift from the past and is geared toward the theme of partnership with Indian defense companies and not mere purchase of weapons, according to defense analysts.
Unveiling the DPP while inaugurating Defexpo 2016, Indian Defence Minister Manohar Parrikar said the new policy "would give boost to [the] Make In India initiative."
DPP comes into effect April 1 and will supersede 2013's DPP, a Minister of Defence official said.
The new DPP will give top priority to a new category of procurement known as Indigenous Design, Development and Manufacturing (IDDM). Products bought under this category would require 40 percent indigenous content if the design of the product is also indigenous; otherwise it will require 60 percent indigenous content.
Under the new policy, top priority to acquiring weapons will be given to Buy (Indian — IDDM) followed by Buy (Indian), Buy and Make (Indian), and Buy and Make (Global); the last priority will be given to Buy (Global) category.
In another change, foreign companies will now have to transfer technology for providing maintenance infrastructure, even under the category Buy (Global).
The new DPP has increased the bar for fulfilling mandatory defense offsets by overseas companies. Now, mandatory offsets will be discharged by overseas defense companies only when the contract is over $296 million compared to the existing level of $45 million — a relief to overseas defense companies.
Talking to reporters at Defexpo 2016, Parrikar said the policy to allow private-sector defense companies as strategic partners for big ticket defense projects is likely to be cleared by the government in the next three months.
Defexpo 2016, which has shifted to Goa for the first time, has attracted a record number of more than 1,000 overseas and domestic defense companies.
"The participation was beyond our expectations as 1,035 (companies participating) is a number which exceeded our expectation by 20 to 25 percent," Parrikar said.
Vivek Raghuvanshi is the India correspondent for Defense News.
