Apurva Chandra, Director General - Acquisition, Ministry of Defence, told reporters at a press briefing that the procedure on leasing defence equipment is in the new DAP as it may be cheaper in the long run to lease

New Delhi: The government's new defence acquisition procedure (DAP) unveiled Monday has five new chapters on issues like a separate procurement category called "leasing", procurement of information and communication technology (ICT) systems and post-contract management. The new chapters in the DAP also include topics like acquisition of systems "designed and developed" by the Defence Research and Development Organisation, the Ordnance Factory Board and Defence Public Sector Undertakings as well as simplified capital expenditure procedure.

Apurva Chandra, Director General - Acquisition, Ministry of Defence, told reporters at a press briefing that the procedure on leasing defence equipment is in the new DAP as it may be cheaper in the long run to lease.

"If we purchase the equipment, we have to create a lot of infrastructure for its upkeep," he added. "When we lease equipment, we also benefit as the interest rates abroad are quite low."

In March this year, the first draft of the DAP had introduced "leasing" as one of the categories to get defence equipment at affordable rates. The second draft has a whole chapter on it explaining the terms, conditions and procedure for procurement under the "leasing" method.

"The new chapter on procuring ICT systems and products is to harness the expertise India has in the software sector," he stated.

Chandra said in the chapter related to ICT systems, issues like "interoperability and built-in upgradability" have also been included.

He said the chapter on post-contract management is about formalising procedures related to issues like damages and inspections that arise after the procurement contract is signed.

In the draft DAP issued on July 28, it was mentioned that the chapter on acquisition of systems from the DRDO, the OFB and DPSUs has been inducted as this process "will help not only in translating the existing indigenous technological capability into systems, but also in implementing 'Make in India' with indigenous technology through Indian industry".

The DAP is issued to ensure timely procurement of best military equipment and platforms for the armed forces through optimum utilisation of budgetary resources.

Moreover, the DAP's focus is also on promoting self-reliance in defence equipment production, with an ultimate aim to develop India as a global defence manufacturing hub.

The DAP remains in place for a period of five years. The last DAP was issued in 2016.

According to the Department of Defence Production, India aims to export defence products worth Rs 15,000 crore in 2020-21. Between April 1 and July 23, India has been able to export defence equipment and platforms worth Rs 1,892 crore, it said on its website.

In 2019-20 and 2018-19, India's defence exports stood at Rs 9,115 crore and Rs 8,320 crore, respectively, the department noted.