The Defence Procurement Procedure (DPP) is not merely a procurement procedure- it is also an opportunity to improve efficiency of the procurement process, usher change in the mind-sets of the stake holders and promote growth of the domestic defence industry. However, these opportunities are not natural outcomes of merely publishing the DPP and are highly dependent on the manner in which the DPP is implemented. In that sense, DPP should be amply supported by an eco-system of result orientation, commitment to timelines, iterative learning and continuous improvement- involving the active ownership of all stakeholders concerned. Hence the Ministry of Defence (MoD) is determined to treat DPP 2016 as a dynamic and an evolving document and is committed to making improvements based on emerging data and anecdotal evidence, to realize the vision of "Make in India‟ in the defence sector.
Defending the World
As India gears up to spend USD 130 bn on military modernization in the next 5 years, achieving self- reliance in defence production is a key target for the Government of India. The focus on indigenous manufacturing has opened up the defence industry for private sector participation and is paving the way for foreign original equipment manufacturers to enter into strategic partnerships with Indian companies.
With a view to facilitating DPSUs and private defence industry in exploring business opportunities abroad, a Defence Export Strategy has been formulated. Approximately, USD 317 mn Made-in-India defence platforms, equipment and spares were exported to over 28 countries in the world between 2015-16.
100% FDI in defence sector: Up to 49% under automatic route; FDI above 49%, through Government route.
for more details refer FDI Policy 2017
- Third largest armed forces in the world
- Ongoing DRDO projects in India of worth USD 7.3 bn
- 30% offset requirement for procurement of equipment in excess of USD 307.69 mn
A 5.3% increase was recorded in defence budget 2017-18 compared to 2016-17.
The allocation for defence in budget in 2017-18 is nearly USD 41 bn with USD 13.3 bn allocation for capital expenditure equivalent to 31.7% of the total budget.
India contributes 3.3% of global military expenditure (2016)
- Service /Department-wise Allocation as percentage to Total Defence Estimates 2017-18 (BE): :
- Army: 55.9%
- Navy: 14.6%
- Air force: 22.5%
- DGOF (Directorate General of Ordnance Factories): 0.8%
- DGQA (Director General of Quality Assurance): 0.5%
- R&D: 5.7%
- % of GDP spent on defence
- % of global arms import
- Turnover of OFB in FY 2015-16
USD 2.1 bn
- Exports worth (2016)
USD 309 mn
FDI (in USD) in defence industries during Apr 2000 - Jun 2017
FDI allowed under automatic route
FDI allowed under government route
October 2017 - Eric Trappier, Chairman of Dassault Aviation and Anil D. Ambani, Chairman of the Reliance Group laid the Foundation Stone for the Dassault Reliance Aerospace Limited manufacturing facility in Mihan, Nagpur located in India’s western state of Maharashtra.
April 2017 - Tata Safari STORME’s into the Indian Army with the initial order for 3192 units
March 2017 - Airbus is setting up a greenfield training facility at Aerocity, New Delhi, to support India’s growing need for Airbus aircraft pilots and maintenance engineers.
January 2017 - BAE Systems has received a USD 542 mn contract from the U.S. Department of Defense to provide 145 M777 ultra-lightweight howitzers to the Indian Army through a Foreign Military Sale between the U.S. and Indian governments.