New Defence procurement policy 2016 was unveiled by Defence MinisterManohar Parrikar, with an aim to ensure transparency, fast track acquisition process and give a push to ‘Make in India’ initiative. The key provisions of the DPP 2016 are based on the Dhirendra Singh committee report that was appointed in May 2015 to review the DPP 2013. The aim of the DPP is to ensure timely procurement of military equipment, systems, and platforms as required by the armed forces through optimum utilization of allocated budgetary resources.

To be applicable from April, the procurement policy lays the roadmap on how India, the world’s largest arms importer, will acquire defence equipment in the future.

The new DPP has included a new category to acquire weapons–IDDM (Indigenously Designed, Developed and Manufactured). The IDDM will be the first preferred category of preference. IDDM category was created to boost indigenous production. For procurements under this category, it is mandatory that 40 percent of the content to be sourced locally.

In decreasing order of priority, the procurement of defence equipment under this procedure are categorized as
1) Buy (Indian – IDDM)
2) Buy (Indian)
3) Buy and Make (Indian)
4) Buy and Make
5) Buy (Global)

The new policy also allows the Defence Acquisition Council to take a “fast-track” route to acquire weapons, something which was limited to only the armed forces till now.

In a bid to cut down on the time taken for acquisition process, it mandates that all AONs (Acceptance of Necessity) of a particular platform will be valid for only six months as against the 12-month deadline now. Also, no AON will be notified until it is accompanied by a finalised RFP (Request for Proposal or tender). This means that the time taken for an RFP is cut down drastically. Defence export clearances are to be granted online.