ANNOUNCEMENT 20 Apr 2013In April 2013, the government of India announced a change in the local input requirements for the participation in certain public purchases.
NUMBER OF INTERVENTIONS
On 20 April 2013, Indian Ministry of Defense approved the following amendments in the Defense Procurement Procedure (DPP)-2011, primarily focusing on indigenization of defense products.
The relevant amendments are as follows -
i) Preference categories are made a part of capital acquisition under the DPP. The order of preference is: (1) 'Buy (Indian)'; (2) 'Buy & Make (Indian)'; (3) 'Make'; (4) 'Buy & Make with ToT'; and (5) 'Buy (Global)'. It is necessary to give justification for not selecting higher categories
ii) The 15 year (2012-2027) plan of defense acquisition has been made available publicly to guide private technology and R&D investments.
iii) The procedural requirements under the "Buy & Make (Indian)", where Indian firms form joint ventures with global firms to build required items in India, have been simplified.
iv) Indigenous content requirements under the "Buy (Indian)" category have been made more stringent for the core components.
v) Definition of "indigenous" within the policy has been made unambiguous and the requirements more stringent.
vi) A penalty has been stipulated for not meeting indeginzation requirements, although there is an opportunity to make up for deficiencies in future stages.
vii) Earlier, public enterprises had automatic nomination for maintenance contracts of imported systems. This policy has been abolished, and all public and private bidders can now compete for such maintenance, repairs and overhauls work.