New defence acquisition policy comes into effect from today: What it means

Defence Minister Rajnath Singh on Monday unveiled the new Defence Acquisition Procedure (DAP). It focuses on significantly boosting indigenous production and turning India into a global manufacturing hub of weapons and military platforms.The new Defence Acquisition Procedure 2020 has come into effect from today, October 1. It will supersede the Defence Procurement Procedure of 2016. 

Government has changed 15-year old policy by removing the clause for offsets for inter-government agreement (IGA), government-to-government defence deals and single-vendor contracts for the procurement of arms and military platforms for the armed forces.

But what is defence offset?

Under the offset policy, the foreign defence entities were mandated to spend at least 30 per cent of the total contract value in India through procurement of components, transfer of technologies or setting up of research and development facilities. This condition was for all contracts worth more than Rs 2,000 crore. But this is now history.

What is Defence Acquisition Procedure 2020?

Defence Minister Rajnath Singh on Monday said the DAP has been aligned with the vision of the government's 'Aatmanirbhar Bharat' (self-reliant India) initiative and to empower Indian domestic industry through 'Make in India' projects with the ultimate aim of turning India into a global manufacturing hub. 

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