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In a major policy overhaul aimed at boosting efficiency, transparency, and self-reliance in defence operations, the Ministry of Defence has officially unveiled the Defence Procurement Manual (DPM) 2025. Approved by Defence Minister Rajnath Singh on September 14, this new framework is designed to streamline revenue procurement processes across the armed forces, with a focus on speed, fairness, and indigenous innovation. The manual replaces the previous version from 2009 and is expected to govern procurement worth nearly Rs 1 lakh crore in the current fiscal year.
Here’s a comprehensive breakdown of what’s changing and why it matters.
1. Core objectives of DPM 2025
- Simplify and rationalise procurement procedures under the revenue head, which includes operations and sustenance
- Ensure timely availability of critical resources to the armed forces at appropriate cost
- Foster jointness among the Army, Navy, and Air Force to enhance military preparedness
- Align procurement practices with modern warfare requirements and public procurement standards
2. Key structural upgrades
- The manual empowers Competent Financial Authorities (CFAs) at field levels to expedite decisions and reduce bureaucratic delays
- File movement between lower and higher formations has been minimised to speed up approvals
- Timely payments to suppliers have been prioritised to improve vendor confidence and delivery timelines
- Bid opening dates can now be extended to encourage broader participation, especially from MSMEs and startups
3. Boosting Aatmanirbharta through innovation
- A new chapter has been added to promote self-reliance via indigenisation and in-house development
- Defence organisations are encouraged to collaborate with private industry, academia, and research institutions like IITs and IISc
- Development contracts have been relaxed to attract new entrants and reduce entry barriers
- Liquidated Damages (LD) will not be levied during the development phase; post-development LD starts at 0.1 percent, capped at 5 percent, and only in extreme delays can go up to 10 percent
4. Industry-friendly provisions
- Suppliers will receive guaranteed orders for up to five years, with possible extensions under special circumstances
- Technical hand-holding support will be provided to vendors during prototype development
- Government-to-Government procurement agreements have been streamlined for faster execution
- No Objection Certificates from Defence Public Sector Undertakings (DPSUs) are no longer mandatory for open bidding, ensuring competitive tendering
5. Strategic impact and future outlook
- The revised manual is expected to strengthen India’s defence manufacturing ecosystem by encouraging domestic participation
- It aligns with the Finance Ministry’s updated Manual for Procurement of Goods, ensuring consistency across departments
- The framework supports the Defence Ministry’s long-term goal of achieving operational readiness with minimal dependency on imports
- Stakeholders across the defence sector, including private players and public institutions, have welcomed the move as a step toward greater transparency and agility
Final takeaway
DPM 2025 is more than just a procedural update—it’s a strategic pivot toward faster, smarter, and more inclusive defence procurement. By empowering field-level decision-makers, incentivising innovation, and simplifying vendor engagement, the Ministry of Defence is laying the groundwork for a more responsive and self-reliant military supply chain. As India continues to modernise its armed forces, this framework could become a cornerstone of defence transformation in the years ahead.
Sources: Hindustan Times, The Hindu, MSN India, New Indian Express.
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