The Defence Acquisition Procedure (DAP), also known as the military acquisition procedure, is the bureaucratic management and procurement process that deals with a country's investments in the technologies, programmes, and product support required to achieve its national security strategy and support its armed forces. This article will explain to you about Defence Acquisition Procedure 2020 which will be helpful in preparing for the International Relations in UPSC Civil Services Examination.

Which is Defence Acquisition Procedure 2020?

• After more than a year of deliberation, the Ministry of Defence (MoD) released the Defence Acquisition Procedure 2020 (DAP 2020) in September 2020.
• This was released in an effort to further streamline the procurement process and boost indigenous arms manufacturing.
• The new procurement manual updates and expands on some of the previous document's provisions while also adding new ones.
• From October 1 2020, the new policy took the place of the 2016 Defence Procurement Procedure.
• In the defence manufacturing industry, the Defence Acquisition Procedure (DAP) 2020 was formed as a potential catalyst for the Atmanirbhar Bharat Abhiyaan.
• The DAP makes it easier for the Tri-Services and other associated defence services to obtain and acquire improved technology, products, and services.
• It seeks to strengthen Make in India initiatives in the field, particularly for MSMEs, with its numerous improved features.
• It also ensures that the industry has a higher level of public responsibility, transparency, fair competition, and a level playing field.

Defence Acquisition Procedure: Background

• In 2002, the first Defence Procurement Procedure (DPP) was issued.
• A committee was formed under the chairmanship of the Director-General (Acquisition) to review the Defence Procurement Procedure (DPP) 2016.
• Based on the recommendations of the Dhirendra Singh Committee, DPP 2016 was released to replace DPP 2013.
• It concentrated on weapon systems designed, developed, and manufactured in the country.
• It was dealing with a number of issues, including a lack of transparency (which led to the Rafale Scam), inconvenient offset regulations, and so on.

Salient Features of DAP

a) Reservation in Categories for Indian vendors

• With FDI in defence manufacturing permitted up to 100 % (up to 74 %under the automatic route and beyond 74% under the Government route), the domestic industry has an opportunity to increase production in the sector.

b) Enhancement of Indigenous Content

• Each of the categories has seen an increase in the procurement and acquisition of indigenously manufactured products and technologies in the sector.
• This would also be aided by Intergovernmental Agreements (IGAs), which would allow for the importation of defence products, technologies, and spare parts.

c) Rationalisation of Trial and Testing Procedures

The trial's scope will be limited to a physical assessment of key operational parameters.

d) Making and Innovation

Aside from Make I/II/III, which are government and industry-funded efforts to increase manufacturing indigenization, the Innovations for Defence Excellence (iDEX) was established to provide incubation and infrastructure support to startup enterprises in the sector.

e) Design and Development

To encourage international firms to set up manufacturing through their subsidiaries in India, provisions such as a new category called "Buy (Global – Manufacture in India)" have been included.

f) Faster Decision Making and a Time-Bounded Defense Procurement Process

To support contract management and streamline the acquisition process, a Project Management Unit was established.

g) Offset Guidelines Have Been Revised

• Manufacturing of full defence goods will be prioritised above component manufacturing, and various multipliers have been included to encourage offset discharge.
• Furthermore, in government-to-government, single vendor, and intergovernmental agreements (IGA), there will be no offset clause.
• Offsets are a portion of a contract price with a foreign supplier that must be re-invested in the Indian defence sector or used to purchase technology by the government.
• Credit values earned on offset trades are known as multipliers. A three-fold multiplier indicates that a foreign corporation can claim credits of up to three times its actual offset investment.
• For all defence capital imports over Rs. 300 crore, the offset policy was implemented in 2005, requiring the foreign vendor to invest at least 30% of the contract value in India.
• According to a recent CAG study, the offset provision was impeding technology transfer.

h) Import Ban

In order to foster domestic and indigenous industry, the Ministry of Defense will issue a list of weapons/platforms that are prohibited from entering the country.

i) Imported Spares Indigenization

Steps have been done to encourage the manufacture of parts in India. This includes establishing co-production facilities through Intergovernmental Agreements (IGAs) in order to achieve "Import Substitution" and lower Life Cycle Costs.

Conclusion

Self-sufficiency in defence manufacturing is a critical component of effective defence capability, as well as maintaining national sovereignty and achieving military superiority. The DAP 2020 not only protects the interests of domestic manufacturers through technology indigenization, but it also encourages foreign investment in the country. India is gradually emerging as an exporter, owing to the government's emphasis on 'Make in India,' with the country now exporting to 42 countries worldwide, including the United States, Australia, Finland, France, Germany, Israel, South Africa, and Sweden.

FAQs

Question. What is the Defence Acquisition Procedure (DAP) 2020?

Question. What are the key objectives of DAP 2020?

Question. How does DAP 2020 support Make in India and Atmanirbhar Bharat?

Question. What are the main categories of procurement in DAP 2020?

Question. What role does the private sector play under DAP 2020?

MCQs

1. When was the Defence Acquisition Procedure (DAP) 2020 introduced?

A) 2018

B) 2019

C) 2020

D) 2021

2. Which of the following categories of procurement in DAP 2020 encourages indigenous production?

A) Buy Indian

B) Buy Global

C) Make with Foreign Technology

D) Buy and Make Global

3. What is the focus of the DAP 2020 in terms of indigenization?

A) Promoting imports

B) Streamlining procurement processes

C) Fostering self-reliance and local manufacturing

D) Enhancing global trade in defence products

4. Which of the following is a major component of DAP 2020 in promoting the private sector?

A) Direct foreign imports

B) Collaboration with state-owned enterprises only

C) Encouraging private sector participation in defence manufacturing

D) Limited involvement of the private sector

5. What is the ‘Make’ category under DAP 2020?

A) Acquisition of foreign-made equipment

B) Indigenous design and development

C) Transfer of technology from foreign countries

D) Import of ready-made systems

GS Mains Questions and Model Answers

Q1. Discuss the significance of the Defence Acquisition Procedure (DAP) 2020 in strengthening India’s defence capabilities.

Answer: The DAP 2020 plays a crucial role in strengthening India’s defence capabilities by focusing on increasing self-reliance in defence production and enhancing the efficiency of procurement processes. The policy encourages indigenization through its emphasis on the "Buy Indian" and "Make Indian" categories, thus reducing dependence on foreign imports. By promoting the private sector’s involvement in defence manufacturing, DAP 2020 aims to create a robust indigenous defence industrial base. Additionally, the policy aligns with India’s “Atmanirbhar Bharat” initiative, fostering innovation and ensuring timely delivery of advanced defence technologies to the armed forces.

Q2. How does the Defence Acquisition Procedure (DAP) 2020 promote transparency and efficiency in defence procurement?

Answer: The DAP 2020 promotes transparency and efficiency by establishing clear guidelines for procurement, setting deadlines for decision-making, and introducing a structured framework for accountability in the acquisition process. The procedure lays out mechanisms for streamlining decision-making, reducing bureaucratic delays, and enhancing oversight. The categorization of procurement types allows for better prioritization of defence requirements and improved resource allocation. Furthermore, DAP 2020 includes provisions for faster acquisition of critical equipment in urgent situations, ensuring that the defence forces are adequately equipped in a timely manner.

Q3. Analyze the role of the private sector under DAP 2020 and its impact on India’s defence sector.

Answer: DAP 2020’s emphasis on the private sector plays a transformative role in India’s defence industry. By encouraging private companies to participate in defence manufacturing, the policy aims to reduce reliance on foreign suppliers and foster innovation in defence technology. The private sector is seen as a key driver of competitiveness and technological advancement, with the potential to create a vibrant defence industrial base. The policy also aims to foster public-private partnerships, enabling the efficient delivery of defence equipment. The integration of the private sector will likely lead to greater production capabilities, enhance export potential, and boost India’s position as a regional power.

Previous Year Questions on  Defence Acquisition Procedure 2020

1. UPSC CSE 2023

Question: "Explain how the Defence Acquisition Procedure (DAP) 2020 promotes self-reliance in the Indian defence sector."

Answer: DAP 2020 promotes self-reliance by prioritizing indigenous products under the “Buy Indian” category and encouraging the domestic private sector’s involvement in defence manufacturing. It supports local innovation and aims to reduce dependence on foreign imports by incentivizing Indian manufacturers to develop advanced defence systems.

2. UPSC CSE 2022

Question: "Evaluate the impact of the Defence Acquisition Procedure (DAP) 2020 on India’s defence preparedness."

Answer: The Defence Acquisition Procedure (DAP) 2020 improves India’s defence preparedness by streamlining procurement processes, enhancing transparency, and prioritizing indigenous manufacturing. This reduces delays in equipment acquisition and strengthens the domestic defence industry, contributing to India’s self-reliance and ensuring that the armed forces are better equipped and ready to meet national security challenges.