DEFENCE ACQUISITION PROCEDURE 2020
Ministry of Defence (MoD) has offered four projects to the Indian Industry for design & development under Make-I category of Defence Acquisition Procedure (DAP) 2020.
Charleston Make-I category
The industry will be provided financial support for prototype development of these projects.
The list of projects which were accorded ‘Approval In-Principle (AIP)’ by Collegiate Committee of MoD is as follow:
- Indian Air Force: Communication Equipment with Indian Security Protocols (Routers, Switches, Encryptors, VoIP Phones and their software)
- Indian Air Force: Airborne Electro Optical pod with Ground Based System
- Indian Air Force: Airborne Stand-off Jammer
- Indian Army: Indian Light Tank
This is for the first time since the launch of DAP-2020 that Indian Industry has been involved in development of big ticket platforms such as Light tank and Communication Equipment with Indian security protocols.
In addition, AIP has also been accorded to following five projects under industry-funded Make-II procedure:
- Indian Air Force: Full Motion Simulator for Apache Helicopter
- Indian Air Force: Full Motion Simulator for Chinook Helicopter
- Indian Air Force: Wearable Robotic Equipment for Aircraft Maintenance
- Indian Army: Integrated Surveillance and Targeting System for Mechanised Forces
- Indian Army: Autonomous Combat Vehicle
Projects under ‘Make-II’ category involve prototype development of equipment or their upgrades or their components, primarily for import substitution/innovative solutions, for which no Government funding will be provided for prototype development purposes.
DAP 2020 – HIGHLIGHTS
- Reservations for Indigenous firms
- 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.
- Stipulates indigenisation of at least 50 per cent of the overall contract value of a foreign purchase bought with the intention of subsequently building it in India with technology transfer
- Meeting the difficult indigenisation requirement would force the vendor to build the equipment in India, rather than supply most of it ready-built from abroad.
- 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 per cent higher
- Indigenous content will now be calculated on ‘Base Contract Price’, that is Total Contract Price, less taxes and duties
- The “import embargo list” of 101 items that the government promulgated last month has been specifically incorporated into DAP 2020
- The government has decided not to have an offset clause in procurement of defence equipment 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.