Context: Recently, Defence Minister of India has unveiled the ‘Defence Acquisition Procedure (DAP) – 2020’. 
Background

• The first Defence Acquisition Procedure was promulgated in 2002. Since then it has been revised several times.
• The DAP 2020 will eventually replace the existing Defence Procurement Procedure (DPP) 2016.
• DAP comprises processes that should be followed by the Government entities while procuring defence items.
• It is framed to simplify the defence procurement procedure and to achieve the objective of self-reliance.
• The procedure aims to promote indigenous design and manufacturing of defence weapons in a time-bound manner.

Key Features of DAP

• Notify a List of Weapons/Platforms for Ban on Import: Relevant incorporation has been done in the DAP to ensure that NO equipment as mentioned in the list is procured ex import post timelines notified.
• New Category of Buy (Global – Manufacture in India): The new category incorporates ‘manufacture of either the entire/part of the equipment or spares/assemblies/sub-assemblies/Maintenance, Repair and Overhaul (MRO) facility for the equipment, through its subsidiary in India.
• Revised Offset Guidelines: The Offset guidelines have been revised, wherein preference will be given to manufacture of complete defence products over components and various multipliers have been added to give incentivisation in discharge of Offsets.
• Project management unit: Setting up of a project management unit (PMU) has been mandated to support contract management. The PMU will facilitate obtaining advisory and consultancy support in specified areas to streamline the acquisition process.
• Cost Cutting: Leasing has been introduced as a new category for acquisition in addition to the existing ‘Buy’ and ‘Make’ categories so that periodical rental payments are made instead of huge capital investment.
• This will be useful for military equipment not used in actual warfare like transport fleets, trainers, simulators, among others.
• FDI in Defence Manufacturing: Provisions have been incorporated like a new category ‘Buy (Global – Manufacture in India)’, to encourage foreign companies to set up manufacturing through its subsidiary in India.
• Ease of Doing Business: One of the key focus areas of the review was to implement ‘Ease of Doing Business’ with emphasis on simplification, delegation and making the process industry friendly with certain specific provisions.
• Reservation in Categories for Indian Vendors:The categories of Buy(Indian-IDDM), Make I, Make II, Production Agency in Design &Development, OFB/DPSU and SP model will be exclusively reserved for Indian Vendors meeting the criteria of Ownership and Control by resident Indian Citizens with FDI not more than 49%. This reservation will provide exclusivity in participation to domestic Indian industry.

Enhancement in Indigenous Content (IC)

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Also Read: https://abhipedia.abhimanu.com/Article/IAS/MTQ1ODUy/Defence-Procurement-Procedure--DPP--2020-Science-Affairs-IAS