Draft defence buying policy raises 'Made in India' content norms

The draft Defence Acquisition Procedure (DAP) 2026 proposes to accelerate defence acquisition, tighten timelines, and boost indigenous manufacturing through simplified procurement categories, faster trial and approval processes, new acquisition pathways, and higher indigenous content mandates.

 

Set to replace DAP 2020, the draft framework was released by the Ministry of Defence (MoD) on Tuesday for stakeholder consultation, with feedback invited until March 3. The DAP governs and lays down the rules and timelines for the procurement of equipment, platforms, and systems under the capital head of expenditure.

 

The major changes proposed in DAP 2026 compared with DAP 2020 include reducing procurement categories from five to four, introducing a formal definition of what qualifies as “indigenous design”, and raising the mandated indigenous content from 50 per cent to 60 per cent under the Buy (Indian–Indigenously Designed, Developed and Manufactured) (IDDM) acquisition route, along with the provision of incentives.

 

Compared with the currently in-force DAP 2020, the draft DAP 2026 removes the ‘Buy (Indian)’ category.

 

Under DAP 2020, the Buy (Indian) category referred to the acquisition of equipment from an Indian vendor that may not have been designed or developed indigenously, provided it had at least 60 per cent indigenous content, calculated on the cost basis of the base contract price.

 

Under the Buy (Indian–IDDM) route, equipment to be procured must be indigenously designed, developed, and manufactured by Indian vendors — a definition that excludes wholly owned local subsidiaries of foreign defence companies. The Buy (Indian–IDDM) route will be given first preference in selecting the acquisition category, provided the stipulated conditions are met.

 

The draft also proposes involving subject-matter experts in the finalisation of staff qualitative requirements (SQRs) and specifications, as well as in the oversight of trials.

 

SQRs are specific, documented standards, qualifications, and performance metrics that equipment must meet to fulfil operational requirements.

 

The draft policy also introduces two new procedures — “Long Term Bulk Acquisition” to provide industry visibility, and “Low-Cost Capital Acquisition” for fast-moving, low-cost technology items.

 

Marking a sharp departure from earlier policy, the draft proposes allowing single-vendor programmes from the outset under the Buy (Indian–IDDM) category, provided the equipment has reached the stipulated technology readiness level.

 

The draft also proposes monitoring timelines from the request for information (RFI) stage onwards, alongside the planning of concurrent activities, to compress overall acquisition timelines.

 

The RFI stage is used to study available options and gather industry inputs so the government can decide what to buy, how to buy it, what it should cost, and how it will be tested, maintained, and contracted.

 

The draft also proposes refining the Fast Track Procedure (FTP) acquisition route by way of downward delegation for procurement involving emerging technology and technology with shorter development cycles.

 

The FTP will address the urgent procurement of operationally critical equipment, including upgrades, components, ammunition, and software, in cases where standard acquisition timelines risk compromising operational readiness. It may be invoked during war or peace, as well as during crises requiring an immediate military response.

 

“The DAP 2026, the draft of which was released recently by the MoD to replace the existing 2020 version, has been designed to bolster self-reliance, accelerate acquisition timelines, and empower the Indian defence industrial ecosystem,” said a Friday MoD release. It added that the policy aims to build a stronger indigenous defence manufacturing base, reduce import dependence, and position India as a global leader in defence technology. 

In line with a policy initiated in FY21, Rs 1.39 trillion—representing 75 per cent of the Rs 1.85 trillion capital acquisition budget under the Rs 7.85 trillion FY27 defence allocation—has been earmarked for procurement from domestic industry.