DRDO has been supporting nation-building through critical strategic defence technologies and various state-of-the-art weapon systems in the field of missiles, aeronautics, RADARS, SONARS, torpedoes, electronic warfare, life-support technologies, and CBRN protection

The new version of Defence Procurement Manual 2020 which was released by Defence Minister Rajnath Singh on October 20, 2020 has come at a very opportune time when the country is vibrant and is looking for self-reliance in critical defence technologies. There is a huge market to be explored as the Government is eyeing to increase the country's defence production and exports to USD $25 billion by 2025. Similarly, Government funding on procurement of defence equipment has been estimated to be around USD $130 billion in the next five years.

The Prime Minister promulgated “AatmaNirbhar Bharat,” “Make in India”, "Startup India", "Stand-up India" which will prove to be a boon to the domestic defence industries by creation of an enabling ecosystem.

DRDO has evolved over a period to be a powerful defence R&D hub for the country and has developed capabilities in a vast canvas of defence technologies. Today the organization has been supporting nation-building through critical strategic defence technologies and various state-of-the-art weapon systems in the field of missiles, aeronautics, RADARS, SONARS, torpedoes, electronic warfare, life-support technologies, and CBRN protection. The document has therefore come at the most opportune time when there is a need to build flexibility in acquisition and procurement procedures which is the common denominator with which the Procurement Manual 2020 has been promulgated. There has been simplification of procedures and internal restructuring within DRDO for empowerment of Director Generals and project directors through effective governance mechanism for enabling faster decision-making capabilities to promote quicker execution of projects.

Through this document, DRDO has gone further by stimulating development of indigenous technologies by placing 108 technologies/ sub-systems in their portal for seeking partnership in research and development and thereby creating opportunities for private industries particularly start-ups and MSMEs to become part of DRDO’s industry base which currently consists of more than 1,800 MSMEs in addition to PSUs and large-scale industries.

Today major industries like L&T, TATA, Godrej, Mahindra & Mahindra, Reliance have also blossomed and are investing heavily on Research & Development. This manual will also open gates for academic institutes to join hands with industries for enhancing the nation’s manufacturing capability while adopting the concept of “My brain, Your hands” wherein ideas put forth by DRDO for technological advancements in the next 15 years can be taken up for research and development for meeting the requirements of the defence sector.

The initiative is a step towards increasing private participation right from design, development, test & evaluation, manufacturing and after sales support. The highlights of the manual includes placement of order on second lowest bidder (L2) in case lowest bidder (L1) is not able to fulfil the contract, thereby cutting short the process and facilitating quicker procurement which was delayed earlier due to re-tendering procedures. Another enabling measure is the exemption of bid security and performance security of up to Rs. 10 lakh, no negotiation for commercial off- the- shelf (COTS) items, and services wherever price discovery is taking place due to market forces, safeguarding of free issue material through insurance cover instead of bank guarantee, and reduction of liquidated damage rate for development contracts. The manual will therefore facilitate faster execution due to simplified procedures as what took six months earlier will now be achieved in a month.

An important move of increasing the quantum of advance payment from 15% to 40% will prove to be beneficial as manufacturing of defence equipment is expensive, time consuming and requires availability of enough funds. This will help MSMEs sustain themselves during the long gestation period of product introduction, qualification and coming into use in commercially meaningful quantities.

DRDO also been contemplating on Government Owned Contractor Operated (GOCO) model in order to create an ecosystem to improve the operational efficiency and creating opportunities for private industries. In order to bolster its domestic defence manufacturing base, the government has already released a negative list of weapons and platforms comprising of artillery guns, assault rifles, ammunition, radars, communication satellites which are banned from import over the next few years, making way for local manufacturing units to capture market worth around USD $53 billion.

The announcement of Procurement Manual 2020 will further support in establishing India as a global defence industry hub by strengthening the partnerships with MSMEs and start-ups. The domestic defence ecology will be boosted through indigenous production and at the same time catalyse job creation and harness the potential of the Indian industrial base.

Certainly, the Government needs to ensure a conducive environment for the implementation of the manual in sync with the National goals for achieving the vision of a self-reliant India.