Defence Acquisition Council approves major changes in Defence Procurement Procedure 2016

The Defence Acquisition Council (DAC) chaired by the Union Defence Minister Manohar Parrikar has approved major changes in the new Defence Procurement Procedure (DDP) 2016. These changes were made in Defence Procurement Procedure 2016 to streamline defence acquisitions and give a big impetus to indigenisation of Defence sector through the ‘Make in India’ initiative. Some of the changes were based on re-commendations of the expert committee headed by the former Home Secretary Dhirendra Singh.

Major Changes are

• Addition of new category to promote domestic manufacturing, including government funding.


• The funding will be mainly in technology development for Research and Development (R&D) and recognition of the Micro, Small & Medium Enterprises (MSME).


• New category Indigenously Designed, Developed and Manufactured (IDDM) platforms have been added and it will be the priority route for procurements.


• Under IDDM, there will be 2 sub-categories one with mandatory 40% domestic content for a domestic design. Other will be for mandating 60% local content if the design is not domestic.


• Under it, eligible domestic companies will have majority Indian control and operated by the Indian nationals.


• Government will fund private Research &Development for building a defence technology base in the country for which various norms have been stipulated.


• Under it companies are eligible for up to 90% funding. Contentious issue of offsets has been amended from the current 300 crore rupees to 2000 crore rupees to give flexibility for foreign companies.


• Currently, offset clause mandates that a foreign company should invest 30% of the contract value back into the country with a view to bring in technology.

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Defence Acquisition Council approves major changes in Defence Procurement Procedure 2016

DAC gives nod to purchase of Russian S-400 Trium Air Defence Missile Systems

The Defence Acquisition Council (DAC) has cleared the purchase of Russian advance S-400 Trium Air Defence Missile Systems at an estimated cost of 40,000 crore rupees. Decision in this regard was taken by the DAC meeting chaired by the Union Defence Minister Manohar Parrikar in New Delhi. DAC approval for defence deal comes ahead of Prime Minister Narendra Modi’s visit to Russia later in December 2015. India would buy Five units of the S-400 Trium air defence missile systems that are capable of destroying incoming hostile missiles, aircraft & even drones within a range of up to 400 km. This purchase will give a major boost to the national air defence capacity and make India only the 2nd buyer of the missile system after China. The S-400 System is also capable of taking out ballistic missiles and hypersonic targets.

DAC also gave approval for

• Indian Army’s proposal for the purchase of Six regiments of the Pinaka rocket system under the ‘Make in India’ category for 14,600 crore rupees.


• Each regiment of the Pinaka rocket system comes with 18 launchers and every launcher has the capability of firing 12 rockets at the same time.


• Indian Army’s demand for 571 light bullet proof vehicles to be used in counter terrorism & counter insurgency operations. It was cleared at a cost of 310 crore rupees.


• Purchase of 120 trawls to be used on Russia origin T-72 & T-90 tanks under Buy Global category for 450 crore rupees.


• It should be noted that DAC is the apex body of Union Defence Ministry for clearing defence procurement proposals forwarded by the Indian Army, Navy & Air Force.

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DAC gives nod to purchase of Russian S-400 Trium Air Defence Missile Systems