Defence Minister Rajnath Singh has approved the Defence Procurement Manual (DPM) 2025, a revised document aimed at expediting revenue procurements for the armed forces, simplifying processes for domestic industry and supporting innovation in defence manufacturing.
The manual, last updated in 2009, lays down principles and provisions for all revenue procurements in the Defence Ministry, which are expected to touch around Rs 1 lakh crore in the current financial year. Officials said the new framework has been aligned with the Ministry of Finance’s procurement guidelines and updated to meet the demands of modern warfare.
The DPM 2025 introduces several industry-friendly provisions, including easing working capital issues through supportive financing, relaxing penalties and incentivising timely deliveries. Liquidated damages during the development phase will not be levied, while the maximum penalty has been capped at 5 per cent, extendable to 10 per cent only in cases of inordinate delay.
A new chapter has been added to promote self-reliance through indigenisation and innovation, enabling collaboration among private industry, DPSUs, academia and premier institutes like IITs and IISc. The manual also provides for assured order guarantees of up to five years, with the possibility of extension, and envisages “handholding” by the Services in terms of technical know-how and equipment support.
Officials said the revised document seeks to empower competent financial authorities at the field level to take quicker decisions, ensure timely payments to suppliers and cut down movement of files to higher authorities.
Provisions have also been made for collegiate decision-making, increased delegation of powers to extend bid deadlines, and a 15 per cent upfront growth clause for repair and maintenance of aerial and naval platforms to reduce downtime.
To address concerns of a level playing field, the requirement for obtaining no-objection certificates from DPSUs before open bidding has been scrapped, with tenders to be awarded purely on a competitive basis. Limited tendering will be allowed up to Rs 50 lakh and, in special cases, beyond that.
The Defence Ministry said the DPM 2025 will help foster jointness among the Services, strengthen ease of doing business and boost Aatmanirbharta in the defence sector by encouraging active participation of private firms, MSMEs and start-ups alongside DPSUs.
