Defence Procurement Manual 2025

• The Defence Procurement Manual (DPM) 2025 streamlines revenue procurement, boosting efficiency and transparency while advancing Atmanirbhar Bharat and strengthening defence self-reliance.

About Defence Procurement Manual 2025

• Operational Backbone: DPM governs revenue procurements required for the day-to-day functioning, maintenance, and operational readiness of the Armed Forces.
• Capital Divide: It is distinct from the Defence Acquisition Procedure (DAP), which handles capital procurements.
• Reform Synergy: It replaces the earlier manual of 2009 and incorporates lessons from defence reforms under the Atmanirbhar Bharat initiative and the Defence Production and Export Promotion Policy (DPEPP) 2020.
• Fiscal Scale: Effective from November 1, 2025, & is expected to govern revenue procurement of about ₹1 lakh crore by the three-Armed Services under the Ministry of Defence

Significance of the Defence Procurement Manual

• Promoting Indigenisation: Introduces a framework for assured orders up to five years for indigenously developed products, providing predictability for domestic manufacturers.
• Level Playing Field: Eliminates the requirement of No Objection Certificates from Defence Public Sector Undertakings before procurement from private sources.
• Ease of Doing Business: Simplifies procurement worth about ₹1 lakh crore by decentralising authority to Competent Financial Authorities (CFAs) at the field level, enabling faster approvals.
• Relaxed Penalties: No Liquidated Damages (LD) during development; minimal post-prototype penalties incentivise genuine suppliers and support indigenisation.

Challenges Within the Defence Procurement Manual

• High Import Dependence: India remains the world’s largest arms importer (SIPRI, 2024), with around 36% of its defence needs sourced externally.
• Low R&D Spending: Defence research accounts for less than 1% of GDP, limiting innovation capacity.
• Limited Private Sector Participation: Historically dominated by public sector undertakings, private firms contributed only 22% of total defence production (MoD, 2023–24).

Foundation Courses

Way Forward

• Support to MSMEs: Simplify eligibility norms, expand limited Tender options up to ₹50 lakh to promote inclusion and align the manual with MSME Samarth and Make in India initiatives.
• Capacity Building: Establish Defence Procurement Training Institutes for the uniform implementation of procedures. E.g. United Kingdom’s Defence Equipment and Support Agency.
• Monitoring & Transparency: Create a digital monitoring dashboard for tracking revenue procurement at all stages. E.g. South Korea’s Defence e-Procurement System (D2B).
• Encouraging MRO Sector: Allow a 15% upfront growth margin during refits and overhauls to strengthen the Maintenance, Repair and Overhaul ecosystem. E.g. Indian Navy’s MRO Vision 2030.

The DPM 2025 advances Atmanirbhar Bharat and Defence Modernisation by streamlining procurement, fostering indigenisation, and empowering private participation. Strengthened transparency, digital governance, and industry–defence synergy will enhance operational efficiency and ensure long-term strategic self-reliance.

Reference: The Hindu | PMFIAS: India’s Defence Modernisation Roadmap

PMF IAS Pathfinder for Mains – Question 393

Q. Examine how the Defence Procurement Manual (DPM) 2025 transforms India’s defence ecosystem from a buyer’s market to a builder’s ecosystem. How can its focus on indigenisation and private participation boost preparedness for hybrid warfare? (150 Words) (10 Marks)

Approach

• Introduction: Write a brief introduction about the Defence Procurement Manual 2025.
• Body: Examine how the Defence Procurement Manual (DPM) 2025 transforms India’s defence ecosystem and also write how it boost preparedness for hybrid warfare.
• Conclusion: Emphasis on self-reliance to enhance India’s readiness for hybrid and multi-domain warfare.