India updates defence procurement rules

The value of defence production in India increased by more than 70% between 2016–17 and 2023–24. (Janes)

India's Ministry of Defence (MoD) has launched updated defence procurement rules, aimed at providing further support for localised private-sector research, development, and manufacturing.

The updated Defence Acquisition Procedure 2020 (DAP 2020) was issued by the MoD in mid-July. The MoD made no formal announcement about the update, but the new rules introduce several new mechanisms and requirements for companies bidding to supply defence equipment to the Indian military.

The updated rules provide additional support for spiral development programmes, introduce additional guidelines for offset-related technology transfers and the procurement of raw materials, outline new methodologies to evaluate intellectual property (IP), and institute a host of other measures to support new and small defence businesses.

The concept of a ‘spiral development model' was introduced by the DAP 2020 on the policy's launch in late September 2020.

The newly updated version of the policy provides greater detail about this model, which is to be operated and financially supported by India's Innovation in Defence Excellence (iDEX) and Technology Development Fund (TDF), MoD schemes to support private-sector research and development.

This new model outlines three stages of spiral development for procurements valued at less than INR2.5 billion (USD29.9 million), with varying levels of compliance with user requirements. The model is intended to enable suppliers to secure what the MoD terms as “minimum pilot order quantities”, based on end-user requirements, for field evaluations.

The new ‘guidelines for the acquisition of technology' apply to offset-related technology transfers from foreign suppliers to state-owned defence public sector undertakings (DPSUs) and the Defence Research and Development Organisation (DRDO).