Defence Acquisition Procedure (DAP) – 2020                                     

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Context: The government gave its in-principle approval to a raft of indigenous defence projects that will involve design and development by the industry, with the military hardware covering light tanks, airborne stand-off jammers, communication equipment and simulators.

• The defence ministry has cleared nine such projects: four under the ‘Make-I’ and five under the ‘Make-2’ categories of the Defence Acquisition Procedure 2020.
• The ‘Make’ category of capital acquisition seeks to build indigenous capabilities through the involvement of both public and private sector.
• ‘Make-I’ refers to government-funded projects while ‘Make-II’ covers industry-funded programmes.
• The industry will be provided financial support for prototype development of these projects.
• Projects under ‘Make-II’ category involve prototype development of military hardware or its upgrade for import substitution for which no government funding is provided.

About DAP 2020:

• It has been aligned with the vision of the Government  of Atmanirbhar Bharatand empowering Indian domestic industry through Make in India initiative with the ultimate aim of turning India into a global manufacturing hub.
• It has adequately included provisions to encourage FDI to establish manufacturing hubs both for import substitution and exports while protecting interests of Indian domestic industry.  

Salient features of DAP 2020

• Reservation in Categories for Indian Vendors.      The categories of Buy(Indian-IDDM), Make I, Make II, Production Agency in Design &Development, OFB/DPSU and SP model will be exclusively reserved for Indian Vendors meeting the criteria of Ownership and Control by resident Indian Citizens with FDI not more than 49%. This reservation will provide exclusivity in participation to domestic Indian industry.
• Enhancement of Indigenous Content.          

Overall Enhancement in Indigenous Content (IC).

• IC Verification.       A simple and practical verification process has been instituted and  IC will now be calculated on ‘Base Contract Price’ i.e. Total Contract Price less taxes & duties.
• Indigenous Military Material.  Promoting use of indigenous military material with provisions for examination of platforms and other equipment/ systems and reward for vendors for using indigenous raw material.
• Indigenous Software.      Provision for exploring options for operating base applications like Fire  Control  System,  Radars,  Encryption, Communications etc on indigenous software in Buy (Indian- IDDM) & Buy (Indian) cases has been included.
• Make & Innovation

(a)       Make I (Government Funded upto 70%).     Laying down a cap of Rs 250 crore/DA and selection of DAs based on bidding criteria.

(b)       Make II (Industry Funded) for production of indigenously designed & developed weapons/equipment/systems/platforms along with sub components/assemblies.

(c)       Make III (Indigenously Manufactured) category for manufacture of equipment/platforms or spares/assemblies/sub-assemblies for enabling import substitution.

(d)       Procurement of prototypes developed through ‘Innovation’ under various initiatives like iDEX, Technology Development Fund and Internal Services Organisations has been facilitated.

• Design & Development. A separate dedicated chapter has been incorporated in the DAP 2020 for acquisition of systems Designed and Developed by DRDO/DPSUs/OFB. A simplified procedure with Integrated Single Stage Trials to reduce timelines and laying greater emphasis on evaluation through certification and simulation.

https://www.business-standard.com/article/economy-policy/ministry-of-defence-nod-to-india-inc-to-build-light-tank-defence-equipment-122030301496_1.html