Govt approves Defence Procurement Policy, 2008

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New Delhi, Jul 9 (UNI) The government today put its stamp of approval on the Defence Procurement Policy (DPP), 2008 which is set to put defence deals on a fast track.

The Defence Acquisition Council chaired by Defence Minister A K Antony approved the DPP, 2008.

The new policy would get operational from August 1, 2008, Defence ministry officials said.

''The policy has accumulated the collective experiences of the Services and the Defence Ministry in the field of procurement in the last two years,'' officials said.

The 2008 DPP is essentially an amendment to the Defence Procurement Policy of 2006. The new policy calls for speedier procurement procedure of systems, weapons and platforms for the Armed Forces.

The procurement procedure has been made time bound to avoid unnecessary delay in deals. The Defence Ministry will also place the policy on its website to bring in a sense of transparency.

India is expected to spend a whopping USD 30 billion on acquisition of military hardware and software from abroad during the 11th Plan period (2007-2012).

Keeping this in mind, the new Policy mandates that a foreign vendor who bags a deal over Rs 300 crore must plough back at least 30 per cent of the contract value back into India or source defence products or services from the country of that value.

But the request for proposal issued last year for the Rs 42,000 crore project to acquire 126 multi-role fighter jets for IAF lays down a 50 per cent offset provision. Sources indicated that a 50 per cent offset clause may now be added to all defence deals beyond Rs 300 crore.


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