Why in news?
The Ministry of Defence approved the Defence Procurement Manual 2025, replacing the 2009 version. The manual governs revenue procurement of goods and services worth about â‚ą1 lakh crore every year for the Armed Forces and other Ministry organisations.
Why update the manual?
Since 2009 the nature of warfare and defence technology has changed dramatically. India’s push for Aatmanirbharta (self‑reliance) in defence requires faster acquisition, greater industry participation and transparent procedures. Modernising the manual aligns procurement with current public procurement norms and encourages innovation.
Key features
- Ease of doing business: Redundant approvals are removed, payments are expedited and bidding processes are simplified. Vendors no longer need a no‑objection certificate from Defence Public Sector Undertakings for most open tenders.
- Industry‑friendly provisions: Suppliers may receive assured orders for up to five years (extendable to ten years in special cases). The government will provide technical support and share equipment for prototype development.
- Relaxed penalties: No liquidated damages during the development phase; post‑prototype penalties capped at 5% (10% only in exceptional cases). This encourages genuine suppliers by reducing fear of punitive action.
- Decentralised decision‑making: Competent Financial Authorities at field level can extend delivery periods, revise bid dates and approve cases without needing higher‑level files, saving time.
- Innovation and indigenisation: A new chapter emphasises collaboration with IITs, IISc and industry for in‑house design, R&D and import substitution.
- Government‑to‑government procurement: Clear procedures facilitate high‑value purchases directly between governments, speeding up acquisition of critical equipment.
- Alignment with finance rules: The manual synchronises with the Ministry of Finance’s procurement guidelines to ensure transparency, fairness and audit compliance.
Impact
The updated manual is expected to reduce delays, support domestic industry and provide clarity to vendors. Successful implementation will depend on training procurement officials, robust oversight and continuous feedback from industry. By encouraging innovation and easing processes, the manual contributes to India’s goal of building a resilient defence manufacturing ecosystem.