Defence Acquisition Procedure- 2020
- On 28th September, 2020, the Defence Ministry unveiled the Defence Acquisition Procedure (DAP) – 2020.
- The first Defence Procurement Procedure (DPP) was promulgated in the year 2002.
- It has since been revised periodically to provide impetus to the growing domestic industry and achieve enhanced self-reliance in defence manufacturing.
- The Defence Ministry had approved constitution of Main Review Committee under Chairmanship of DG (Acquisition) Shri Apurva Chandra in August, 2019 for preparation of DAP-2020.
Salient features of DAP -2020
Reservation in Categories for Indian Vendors
- The policy reserves several procurement categories for indigenous firms.
- DAP 2020 defines an “Indian vendor” as a company that is owned and controlled by resident Indian citizens, with foreign direct investment (FDI) not more than 49 per cent.
Enhancement of Indigenous Content
- It promotes greater indigenous content in arms and equipment of the military procures, including equipment manufactured in India under licence.
- In most acquisition categories, DAP-2020 stipulates 10 percent higher indigenisation than DPP 2016.
New Buy (Global–Manufacture in India) Category
- This stipulates indigenisation of at least 50 percent of the overall contract value of a foreign purchase bought with the intention of subsequently building it in India with technology transfer.
Ease of Doing Business
- One of the key focus areas of the review was to implement ‘Ease of Doing Business’ with emphasis on simplification, delegation and making the process industry friendly.
Design & Development
- A separate dedicated chapter has been incorporated for acquisition of systems Designed and Developed by Defence Research and Development Organisation(DRDO), Defence Public Sector Undertakings (DPSUs) and Ordnance Factory Board (OFB).
Import Embargo List
- The import embargo list of 101 items that the government promulgated last month has been specifically incorporated into DAP 2020. (An embargo is a government order that restricts commerce with a specified country or the exchange of specific goods.)
- The government has decided to remove the offset clause if the deal is done through inter-government agreement (IGA), government-to-government or an ab initio single vendor.
- The offset clause requires a foreign vendor to invest a part of the contract value in India.
- Boost to Atmanirbhar Bharat & Maker in India Initiative: Abhiy DAP 2020 has been aligned with the government’s vision of the Atmanirbhar Bharat and empowering Indian domestic industry through Make in India initiative with the ultimate aim of turning India into a global manufacturing hub.
Draft Defence Production And Export Promotion Policy – 2020
- On 3rd August, 2020, the Ministry of Defence (MoD) released a draft Defence Production and Export Promotion Policy 2020 (DPEPP 2020).
Goals and Objectives
- To achieve a turnover of Rs 1,75,000 Crores (US$ 25Bn) including export of Rs 35,000 Crore (US$ 5 Billion) in Aerospace and Defence goods and services by 2025.
- To develop a dynamic, robust and competitive Defence industry, including Aerospace and Naval Shipbuilding industry to cater to the needs of Armed forces with quality products.
- To reduce dependence on imports and take forward "Make in India" initiatives through domestic design and development.
- To promote export of defence products and become part of the global defence value chains.
- To create an environment that encourages R&D, rewards innovation, creates Indian IP ownership and promotes a robust and self-reliant defence industry.
- A negative list of weapons/platforms would be notified with year-wise timelines for placing an embargo on import of such items from those dates.
- A Project Management Unit (PMU), with representation from the Services, would be set up to support the acquisition process and facilitate management of the contracts. This setup would bring in expertise to the process of acquisition as well as create focus and synergy in building military
- In addition, with the aim to move away from licensed production to design, develop and produce indigenously and own the design rights and Intellectual Property (IP) of the systems projected in Long Term Integrated Perspective Plan (LTIPP) of the Services, a Technology Assessment Cell (TAC) would be created.
- The TAC would also assess the industrial capability for design, development and production including re-engineering for production of various major systems like Armoured Vehicles, Submarines, Fighter Aircraft, Helicopters, Radars with the major industries in the country
Indigenization and Support to Msmes/Start-ups
- The indigenisation policy aims to create an industry ecosystem to indigenise the imported components (including alloys and special materials) and sub-assemblies for defence equipment and platforms manufactured in India. 5,000 such items are proposed to be indigenised by 2025.
Optimize Resource Allocation
- The share of domestic procurement in overall Defence procurement is about 60 percent.
- In order to enhance procurement from domestic industry, it is incumbent that procurement is doubled from the current Rs 70,000 crore to Rs 1,40,000 crore by 2025.
Investment Promotion, FDI and Ease of Doing Business
- India is emerging as an attractive investment destination.
- The improvement in market size, demographic dividend and availability of diverse skill sets are evident from India's ranking in the World Bank’s ‘Ease of Doing Business’ (EoDB) report.
- Defence being a monopsony, investments in this sector is incumbent on regular supply of orders.
- India is already a large aerospace market with rising passenger traffic and increasing military expenditure, as a result of which the demand for aircrafts (fixed and rotary wings) is increasing.
Innovation and R&D
- By harnessing the nationwide R&D capabilities, future requirements of the services could be met and critical gaps in related technologies would get addressed.
- Innovations for Defence Excellence (iDEX) has been operationalized to provide necessary incubation and infrastructure support to the start-ups in defence area.
- Mission RakshaGyan Shakti was launched to promote greater culture of innovation and technology development and to file greater number of patents in Defence PSUs and Ordnance Factory Board (OFB).
Quality Assurance and Testing Infrastructure
- The entire process of quality assurance and its time bound delivery would be rationalized and monitored by developing an IT platform withan industry interface.
- For the MSMEs to be more quality conscious, ‘Zero Defect Zero Effect’is being encouraged. This would help industry to adopt Self Certification and Green Channel route through a process facilitated by DGQA/DGAQA.
- Efforts would be made to create testing infrastructure through DefenceTesting Infrastructure Scheme (DTIS) by providing assistance to industry to set up common testing facilities.
- Defence Attachés have been mandated and are supported to promote export of indigenous defence equipment abroad.
- Export Promotion Cell set up to promote Defence exports through coordinated action to support the Industry would be further strengthened and professionalized.
- The end-to-end export clearance process in the Department of Defence Production would be further upgraded to make the process seamless and time-bound.
- Open General Export License (OGEL) regime would be utilized to encourage export of selected defence equipment/items to identified friendly countries.
- The DPEPP-2020 is envisaged as overarching guiding document of MoD to provide a focused, structured and significant thrust to defence production capabilities of the country for self-reliance and exports under ‘Atmanirbhar Bharat Package’.
Defence Testing Infrastructure Scheme
- In order to give a boost to domestic defence and aerospace manufacturing, the government on 15th May, 2020, approved the launch of Defence Testing Infrastructure Scheme (DTIS) with an outlay of Rs 400 crore for creating state of the art testing infrastructure for this sector.
- To promote indigenous defence production, with special focus on participation of MSMEs and Start Ups by bridging gaps in defence testing infrastructure in the country.
- The scheme, announced in August, 2019 under “Make in India”, accorded high priority to development of manufacturing base of Defence and Aerospace sectors in the country to reduce dependence on imports.
- Towards this, Government announced establishment of Defence Industrial Corridors (DICs) in Uttar Pradesh and Tamil Nadu.
- One of the main impediments for domestic defence production is lack of easily accessible state-of-the-art testing infrastructure.
- Defence Testing Infrastructure is often capital intensive requiring continuous upgradation and it is not economically viable for individual defence industrial units to set up in-house testing facilities.
- The Scheme would run for the duration of five years and envisages setup six to eight new test facilities in partnership with private industry.
- The projects under the Scheme will be provided with up to 75 percent government funding in the form of ‘Grant-in-Aid’.
- The remaining 25 percent of the project cost will have to be borne by the Special Purpose Vehicle (SPV) whose constituents will be Indian private entities and State Governments.
- The SPVs under the Scheme will be registered under Companies Act 2013 and shall also operate and maintain all assets under the Scheme, in a self-sustainable manner by collecting user charges.
- While majority of test facilities are expected to come up in the two DICs (one in Tamil Nadu and the other in Uttar Pradesh), the Scheme is not limited to setting up Test Facilities in the DICs only.
- The guidelines specify the establishment of testing facilities for drones and Unmanned Aerial Vehicles (UAVs), radar, electronics/telecom equipment, rubber testing, noise and shock testing, specialised driving tracks, ship motion testing, ballistics and blast testing, and environmental test facilities.
- The scheme is directed towards promoting indigenous defence capability, specifically amongst micro, small and medium enterprises (MSMEs) and start-ups.
- Setting up of Defence Testing Infrastructure will provide easy access and thus meet the testing needs of the domestic defence industry.
- This will help to reduce imports of military equipment and help make the country self-reliant.
India To Get MK 54 Torpedoes And AGM-84L Harpoon Missiles
- On 13th April, 2020, , the US Department of State approved a possible Foreign Military Sale to India of 16 MK 54 all round up lightweight torpedoes and ten AGM-84L Harpoon Block II air-launched missiles.
- India intends to use the equipment on the Indian Navy’s Boeing P-8I maritime aircraft.
MK 54 Lightweight Torpedos
- Previously, known as the Lightweight Hybrid Torpedo (LHT), it weighs around 608 pounds, while its warhead weighs around 96.8 pounds and is highly explosive.
- These torpedoes are used by US surface ships, fixed-wing aircraft and helicopters and are their primary anti-submarine warfare weapon.
- The primary use of this equipment is for offensive purposes when deployed by anti-submarine warfare aircraft and helicopters, and for defensive purposes when deployed by ships and against fast, deep-diving nuclear submarines and slow-moving, quiet, diesel-electric submarines.
AGM-84L Harpoon Block II Air-Launched Missiles
- The Harpoon missile system will be integrated into the P-8I aircraft to conduct anti-surface warfare missions in defense of critical sea lanes.
- It uses GPS-aided inertial navigation to hit the designated target.
- Its warhead weighs over 500 pounds and is capable of delivering lethal firepower against targets, including land-based targets, coastal defence sites, surface-to-air missile sites, exposed aircraft and industrial or port facilities.
- Boeing’s P-8s are designed for long-range anti-submarine warfare, anti-surface warfare and intelligence, surveillance and reconnaissance missions.
- The P-8s India version is called the P-8I, and helps the Indian Navy carry out important maritime operations.
- India currently has eight of these aircraft and is scheduled to receive four more by 2022. One of these is expected to be delivered this year.
Improving Bilateral Relation
- The proposed sale will support the foreign policy and national security of the United States by helping to strengthen the U.S.-Indian strategic relationship.
- It will further help to improve the security of a major defensive partner, which continues to be an important force for political stability, peace, and economic progress in the Indo-Pacific and South Asia region.
Enhancing India’s Strategic Capabilities
- It will help improve India’s capability to meet existing and future threats from enemy weapon systems.
- The Harpoon missile system can perform anti-surface warfare missions to defend critical sea lanes when integrated into the P-8I aircraft.
- The MK 54 lightweight torpedo will provide the capability to conduct anti-submarine warfare missions.
- The enhanced capability will be used by India as a deterrent to regional threats and to strengthen its homeland security.
Defence Procurement Procedure – 2020
- On 20th March, 2020, Defence Ministry unveiled the draft Defence Procurement Procedure (DPP) 2020 that aims at further increasing indigenous manufacturing and reducing timelines for procurement of defence equipment.
- DPP will come into effect from April 01, 2020 and would remain in force till 31 March 2025.
- Dpp-2020, along with several other such innovative measures were part the Draft finalized by a high-level committee headed by DG Acquisition, Ministry of Defence that was set up in August 2019.
- It is to be noted that the first DPP was promulgated in 2002 and has been revised a number of times with last revision in the year 29016.
Major Changes Proposed in New DPP
Higher Indigenous Content
- It proposes increasing the Indigenous Content (IC) stipulated in various categories of procurement by about 10% to support the ‘Make in India’ initiative.
- A simple and realistic methodology has been incorporated for verification of indigenous content for the first time.
Introduction of New Category Buy (Global- Manufacture in India)
- It has been introduced with minimum 50% indigenous content on cost basis of total contract value.
- Only the minimum necessary will be bought from abroad while the balance quantities will be manufactured in India.
- Foreign vendors' products that have a minimum of 50 per cent indigenous content will come under this new category.
- This would be in preference to the ‘Buy Global’ category as manufacturing will happen in India and jobs will be created in the country.
Leasing Introduced as a New Category
- Leasing has been introduced for the first time as a new category for acquisition in addition to existing ‘Buy’ & ‘Make’ categories to substitute huge initial capital outlays with periodical rental payments.
- Leasing is permitted under two categories i.e, Lease (Indian) where Lessor is an Indian entity and is the owner of the assets and Lease (Global) where Lessor is a Global entity.
- This will be useful for military equipment not used in actual warfare like transport fleets, trainers, simulators, etc.
- The scope and options for Product Support have been widened to include contemporary concepts in vogue, namely Performance Based Logistics (PBL), Life Cycle Support Contract (LCSC), Comprehensive Maintenance Contract (CMC), etc to optimise life cycle support for equipment.
- The capital acquisition contract would normally also include support for five years beyond the warranty period.
- Raw Material: Use of raw materials, special alloys and software incentivised as use of indigenous raw material is a very important aspect of ‘Make in India’ and Indian Companies are world leaders in software.
- Single Vendor: Assurance of procurement on a single vendor basis from Aero Engine manufacturing unit and chips from FAB manufacturing units established in the country.
- Procurement of Software and Systems: A new Chapter is introduced for procurement of software and systems related projects as in such projects, obsolescence is very fast due to rapid changes in technology and flexibility in the procurement process is required to keep up with the technology.
- Post Contract Management: It has been introduced to facilitate and provide clear guidelines for issues arising during the contract period as typically Defence contracts last for a long period.
- Reduced Procurement Time: Timelines for procurement reduced by reducing the process for accord of Acceptance of Necessity which would be single stage of projects less than Rs.500 crore and in case of repeat orders.
- Removing Bottlenecks: It will help to remove procedural bottlenecks and hasten acquisition; align and standardise the provisions to optimise life cycle support for equipment and simplify policy and procedures to facilitate greater participation of the industry and develop robust Defence industrial base.
- Boost to Make in India Initiative: The DPP-2020 is aligned with the vision of the government to empower the private industry through the 'Make in India' initiative, with the ultimate aim of turning India into a global manufacturing hub.
- The defence industry of India is a strategically important sector having huge potential for growth and development.
- The government is constantly striving to formulate policies to empower the private industry including MSMEs in order to develop the eco-system for indigenous defence production and DPP-2020 is a huge step in order to provide a catalyst for India’s economic growth and realisation of India’s global ambitions.
New Agency DSRO For Developing Space Weapons
Why is it in News?
The government has given approval to set up a new agency, Defence Space Research Agency (DSRO) that will develop sophisticated space weapons and technologies.
Relevance of the News: It gives an overview of the efforts being undertaken by the government in developing space technologies and securing the space.
Defence Space Research Agency (DSRO):
- The Cabinet Committee on Security headed by the Prime Minister has cleared the setting up of the DSRO which will be geared towards creating space warfare weapon systems and technologies.
- The agency has started taking shape under a Joint Secretary level scientist.
- DSRO would be provided with a team of scientists which would be working in tandem with the tri-services integrated Defence staff officers.
- The DSRA would provide R&D support to Defence Space Agency (DSA).
Defence Space Agency (DSA):
- DSA is an agency which will help India in fighting wars in space. It consists of members of the three services.
- The DSA, being set up in Bengaluru, will gradually take over the space-related work of the three forces.
- DSA is an important institutional initiative that combines two key functions performed by the Defence Imagery Processing and Analysis Centre (DIPAC) and the Defence Satellite Control Centre, representing the growing integration of India’s space capabilities.
- India recently demonstrated India’s anti-satellite (ASAT) capability by conducting successful satellite destruction tests in outer space.
Why is it in News?
A joint military exercise between India and Bangladesh - ‘Sampriti 2019’ was conducted recently in Bangladesh.
It is a bilateral defence cooperation exercise between India and Bangladesh. This was the 8th edition of the military exercise which is held alternately by both the countries.
Objective of Exercise:
It aims to exchange the best practices while dealing with Insurgency & Counter Terrorism Operation.
National Reports On Arms Export/ Imports
Why is it in News?
India is the world’s 2nd largest arms importer as per the reports of SIPRI.
About the Report:
- During 2009-13, India was the world’s largest arms importer, but in a recent report released by SIPRI (Stockholm International Peace Research Institute), India is at the 2nd position and Saudi Arabia has become the largest importer of arms in the world.
- A total of 155 countries imported major arms in 2014–18. The top five arms importers - Saudi Arabia, India, Egypt, Australia and Algeria - accounted for 35% of total arms imports in 2014–18.
- 67 countries exported major arms in 2014–18. The top five - the US, Russia, France, Germany and China - accounted for 75% of all arms exports. The top five in 2014–18 were the same as in 2009–13 but their combined total exports of major arms were 10% higher.
- SIPRI is an international institute based in Sweden, dedicated to research into conflict, armaments, arms control and disarmament.
- It was established in 1966 and is based in Stockholm, Sweden.
- SIPRI provides data, analysis and recommendations, based on open sources, to policymakers, researchers, media and the interested public.
Quick Reaction Surface To Air Missile System (QRSAM)
Why is it in News?
QRSAM was successfully test fired at Chandipur in Odisha's Balasore district in February 2019.
- QRSAM is an indigenously built missile system that uses solid-fuel propellant and has a stated range of strike range of 25-30 km.
- It is an all weather weapon system that is capable of tracking and firing with precision.
- It is capable of engaging multiple targets.
Why was there a need to develop QRSAM in the existence of the Akash Aerial Defence System?
India is placed at a geographical location where it has hostile neighbors like Pakistan and China. Hence, it becomes relevant to develop another missile system rather than relying on a single Air Defense System like Akash.
How QRSAM has an edge over the Akash Missile System:
- QRSAM units are 3 times lighter than the Akash missile unit, which makes it logistically convenient- reloading it and carrying extra units will be easier.
- Shorter second reaction time
- 360 Degree Coverage