 "MoD to reform procurement policy in 6-12 months: Defence Secretary")
India's defence procurement policy, criticised for delays and inefficiencies, will be reformed within six months to a year, Defence Secretary Rajesh Kumar Singh said on Tuesday. His remarks follow the Ministry of Defence's (MoD's) decision to observe 2025 as the "Year of Reforms" and its December announcement that the Defence Acquisition Procedure (DAP) 2020 is "likely to undergo a complete revamp" in 2025. Singh described the policy as "broken" and acknowledged that the system had often failed to meet timelines, stressing the need to "call a spade a spade" and adopt a different approach. He said reforms would focus on streamlining timelines and fixing the procurement process to address long-standing issues.
At the 21st Subroto Mukerjee Seminar, themed "Atmanirbharta in Aerospace: Way Ahead", Defence Secretary Singh described India’s defence procurement system as "broken" and plagued by delays. A video of his speech was shared by a news agency on X (formerly Twitter).
"Our procurement policy, for a long time, has been broken, and I make no secret of that. It's true—we've not been able to do things on time," Singh said. He added, "The timelines we've given ourselves are too luxurious," and pointed out that "very basic things like preparing Requests for Proposal (RFPs) in time, even before you go for an Acceptance of Necessity (AON), were not being done".
Singh noted that requirements were often "gold-plated"—suggesting they included overly ambitious or rigid specifications—while evaluation processes remained lengthy. “It’s time to call a spade a spade. We have to move on to a different approach,” he said. “The procurement side, we will tackle over the course of the next six months to one year, both in terms of the process timelines and in terms of the procedures themselves,” he concluded.
Highlighting India’s progress toward a $4 trillion economy and projected future growth, the Defence Secretary dismissed the idea of a resource constraint, stating that "there's adequate money available for what we want to do" and stressed the need for pragmatic prioritisation of solutions. He noted that despite allocating only 1.9 per cent of gross domestic product (GDP) to defence, even this share is difficult to fully utilise due to limited domestic absorptive capacity.
Singh acknowledged that self-reliance (Aatmanirbharta) in aerospace is sometimes viewed as a trade-off with capability, attributing this to India’s lack of critical technologies such as jet engines and radars. He explained that the country’s shift from a primary sector to a service-led economy, with manufacturing contributing only 15 to 16 per cent of GDP, has resulted in a relatively narrow industrial base. This, he said, has hindered mass production and aerospace advancements, unlike land systems—benefiting from overlaps with the auto sector—and missile systems.
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Highlighting that fostering greater competition in the defence sector is the next key step after reforming procurement, the Defence Secretary stressed the need to address the advantages held by incumbents and the barriers limiting new entrants.
"Our defence industry is the last vestige of the license-permit Raj. We still have industrial licensing—perhaps inevitable—but it needs to be much faster," Singh said. He added, "We create so many hurdles for [defence exporters] that it's a real challenge when it comes to ease of doing business."
Singh noted that the defence manufacturing ecosystem had grown significantly over the past 10 years, with more Micro, Small, and Medium Enterprises (MSMEs) and vendors joining the supply chain. However, he said, "We need to ensure that MSMEs and vendors who supply components to bigger players can climb the manufacturing value chain and become large players themselves." He emphasised that achieving this would require shifting from cost-plus budgeting and orders to competitive commercial contracts to promote innovation and deliver better value for money.
Singh highlighted India's position as the world's third-largest startup ecosystem, noting that many startups are eager to enter the defence sector and have already begun doing so. He emphasised the need to provide them with a level playing field and visibility on orders, adding that such support could enable them to help India advance in critical technologies that have so far been lacking.
Discussing the government's efforts to attract foreign direct investment (FDI) in defence, Singh described the policy as "very liberal, with up to 74 per cent through the automatic route". While acknowledging that only one company, Swedish aerospace and defence major Saab, has invested with 100 per cent FDI, he remarked, "I know there will be more." He also stressed the need to "utilise our buying power as a nation" to attract global Original Equipment Manufacturers (OEMs) to set up manufacturing operations in India through models such as the strategic partnership framework, citing the collaboration between Tata Advanced Systems Ltd and Airbus Spain to manufacture Airbus C295 transport aircraft at a Vadodara facility, inaugurated in October, as an example.
Singh noted that while India must rely on transfer of technology mechanisms in the short to medium term for critical capabilities, the long-term objective remains to indigenously develop these technologies with the support of the Defence Research and Development Organisation (DRDO).
Outlining the way forward, Singh described the Development-Cum-Production Partner (DCP) and Strategic Partnership (SP) models as "very promising" and expressed hope they could be "replicated across the defence domain, particularly in aerospace." Addressing the Indian Air Force's capability gaps, he called for a pragmatic approach, saying, "Ultimately, public policy-making is about optimising from among the constrained choices that you have."
Singh acknowledged that while global purchases would be necessary to meet immediate requirements, efforts to develop indigenous supply lines must continue. "As we do so, hopefully, we will eventually create a large manufacturing ecosystem that can sustain us through complete or near-complete 'Aatmanirbharta'," he concluded.