From Procurement To Acquisition: India’s Shift From Defence Procurement Procedure (DPP) 2016 To Defence Acquisition Procedure (DAP) 2020

Policy Update
Ninchen Tamang

Background

The Defence Procurement Procedure (DPP) and its successor, the Defence Acquisition Procedure (DAP) form the Ministry of Defence’s (MoD) policy framework for acquiring defence equipment and developing military capabilities. Over time, this framework has evolved from focusing primarily on procurement to promoting indigenous design, manufacturing, technology development, and long-term capability building.

The transition from DPP to DAP marked a strategic shift in India’s defence policy from purchasing military equipment to fostering a self-reliant defence industrial base. DPP 2016 replaced DPP 2013 following the recommendations of the Dhirendra Singh Committee, with the objective of making defence procurement more transparent, accountable, and supportive of Indian industry. Between 2016 and 2020, the procedure underwent 47 amendments as part of a Business Process Re-engineering exercise.

Consequently, in August 2019, the Ministry of Defence constituted a review committee under the Director General (Acquisition) to remove procedural bottlenecks, strengthen life-cycle support, and reinforce the Make in India initiative. The review culminated in DAP 2020, promulgated by Defence Minister Rajnath Singh on 28 September 2020 and brought into effect on 1 October 2020 (Press Information Bureau [PIB], 2020).

The renaming from ‘Procurement’ to ‘Acquisition’ reflected a deliberate policy shift. The MoD describes DAP 2020 as adopting a ‘womb-to-tomb’ approach, covering the entire life cycle of defence equipment from design and acquisition to maintenance, upgrades, and disposal rather than ending with contract award (Ministry of Defence [MoD], 2020). While DPP established the foundation for transparent procurement, DAP broadened its scope into a framework for capability development, industrial growth, and strategic self-reliance, aligned with the objectives of Aatmanirbhar Bharat and Make in India.

Functioning

DAP 2020 retained the core framework of DPP 2016, including procurement categories based on indigenous design and development, a multi-stage acquisition process, standardised tender documentation, and offset guidelines. However, it significantly expanded the scope of the acquisition framework. The document increased from 489 pages across seven chapters to 657 pages across twelve chapters, introducing dedicated chapters on acquisition of systems designed and developed by the Defence Research and Development Organisation (DRDO), Defence Public Sector Undertakings (DPSUs), and the Ordnance Factory Board (OFB); Information and Communication Technology (ICT) systems; leasing; Other Capital Procurement Procedure (OCPP); and Post-Contract Management (Behera, 2021).

DPP 2016 had already introduced the Buy (Indian–IDDM) category, giving top priority to equipment designed, developed, and manufactured in India with a minimum of 40% indigenous content, along with the Request for Information (RFI) stage. Nevertheless, its functioning remained largely procurement-oriented, with lengthy approval processes and extended trial timelines often delaying acquisitions.

DAP 2020 broadened this approach by viewing defence acquisition as a complete capability-building process encompassing design, development, manufacturing, procurement, and sustainment. It strengthened the emphasis on indigenous production by increasing the minimum indigenous content requirement for Buy (Indian–IDDM) from 40% to 50%. It also introduced the Buy (Global–Manufacture in India) category to encourage foreign Original Equipment Manufacturers (OEMs) to establish manufacturing and maintenance facilities in India, while leasing was incorporated as a cost-effective alternative for meeting selected operational requirements.

The procedure also restructured capability planning by replacing the 15-year Long-Term Integrated Perspective Plan (LTIPP) with a 10-year Integrated Capability Development Plan (ICDP), supported by a five-year Defence Capability Acquisition Plan (DCAP). The Annual Acquisition Plan (AAP) was expanded from two parts to four, creating stronger links between long-term capability planning and annual procurement priorities.

To reduce procurement delays and improve the ease of doing business, DAP 2020 introduced several procedural reforms. These included Project Management Units (PMUs) for contract management, improved formulation of General Staff Qualitative Requirements (GSQRs), simplified and more transparent trial procedures, single-stage Acceptance of Necessity (AoN) for acquisitions up to ₹500 crore, and greater delegation of powers for processing Fast Track Procurement (FTP) cases after AoN.It also introduced a dedicated chapter on Post-Contract Management to improve life-cycle support and sustainment, alongside a separate acquisition procedure for systems developed by DRDO, DPSUs, and OFB (PIB, 2020).

Overall, while DPP 2016 primarily sought to improve procurement efficiency, DAP 2020 marked a broader policy shift towards capability development by integrating acquisition, indigenisation, contract management, and long-term sustainment within a single framework.

Source: Ministry of Defence (2020). https://www.ddpmod.gov.in/acts-and-policies/defence-acquisition-procedure-2020

Performance

DAP 2020 marked a significant shift in India’s approach to defence acquisition. Rather than treating acquisition as merely a procurement exercise, it positioned it as a means of building long-term domestic capability. The procedure strengthened the Strategic Partnership (SP) Model, which seeks to foster long-term collaboration between selected Indian firms and foreign Original Equipment Manufacturers (OEMs) for major defence platforms. It also expanded the Make framework into three categories: Make-I for government-funded development, Make-II for industry-funded development, and Make-III for manufacturing imported equipment in India as import substitutes, often through technology transfer.

In addition, DAP 2020 reinforced innovation-led participation through initiatives such as Innovations for Defence Excellence (iDEX) and the Technology Development Fund (TDF), encouraging startups, MSMEs, and other Indian firms to develop advanced defence technologies. Collectively, these measures aimed to deepen private-sector participation, strengthen indigenous design and manufacturing, and gradually reduce India’s dependence on imports.

The impact of these reforms is reflected in defence procurement trends. The foreign share of the Capital Acquisition Budget declined from 48.68% in FY 2018–19 to 34.50% in FY 2021–22, while the target for domestic procurement increased from 58%(2020-21) to 64% (2021-22). The Ministry of Defence exceeded this target by allocating 65.5% of the Capital Acquisition Budget to indigenous procurement in FY 2021–22 (MoD, 2022). By FY 2024–25, Indian industry accounted for 92% of all defence contracts, indicating a substantial expansion in domestic participation (MoD, 2025).

Similarly, in recent years, the majority of Acceptance of Necessity (AoN) approvals granted by the Defence Acquisition Council have been issued under indigenous procurement categories, particularly Buy (Indian–IDDM). The policy also coincided with a steady increase in defence licences issued to Indian companies and in the value of contracts awarded to the private sector between 2014 and 2021 (PIB, 2021).

At the same time, these outcomes cannot be attributed solely to DAP 2020. The introduction of the Buy (Indian–IDDM) category under DPP 2016 and the increase in the foreign direct investment (FDI) limit to 74% under the automatic route in 2020 had already set the direction of reform. However, the sustained improvement in procurement patterns after DAP 2020 suggests that the procedure consolidated and accelerated this trajectory rather than merely benefiting from earlier policy changes.

Impact

The transition from DPP to DAP represents far more than a change in terminology; it reflects a strategic shift from procuring military equipment to building long-term national defence capability. By linking acquisition categories with joint ventures, technology transfer, and participation through the Make framework and Innovations for Defence Excellence (iDEX), DAP 2020 connects defence spending with the development of domestic manufacturing capacity rather than one-time imports. The impact of this shift is evident in recent trends. In FY 2024–25 alone, 193 defence contracts worth ₹2.09 lakh crore approx were signed, while India’s indigenous defence production increased from ₹84,643 crore in FY 2020-21 to approximately ₹1,78,000 crore in recent years (PIB, 2026).

The framework has also broadened participation in the defence industrial base. Defence procurement was traditionally dominated by Defence Public Sector Undertakings (DPSUs), but DAP 2020 has created greater opportunities for private firms, MSMEs, and startups through Make-II and iDEX, fostering a more competitive and innovation-driven ecosystem. By March 2026, iDEX had engaged 676 startups, MSMEs, and innovators, resulting in the signing of 551 design-and-development contracts, highlighting the rapid expansion of indigenous defence innovation ecosystem (PIB, 2026).

Another significant reform has been the introduction and expansion of the Positive Indigenisation Lists (PILs), which prohibit the import of specified defence equipment after prescribed timelines, thereby creating assured demand for domestic manufacturers. The Department of Military Affairs has notified PILs covering 411 major military platforms, systems, and equipment, while the Department of Defence Production has issued four PILs comprising over 4,600 line items for indigenisation (PIB, 2023). This represents a stronger policy instrument than anything available under DPP 2016. However, it also raises the stakes: if domestic industry is unable to meet production targets within the prescribed timelines, the challenge could shift from procurement delays to capability shortfalls.

Foreign investment rules have also been liberalised. From 2020, foreign investment of up to 74% is permitted through the automatic route, while investment up to 100% is allowed through the government route where it is likely to result in access to modern technology. By March 2026, cumulative foreign direct investment (FDI) in India’s defence sector had reached ₹6,670.59 crore (PIB, 2026). Alongside these reforms, the government has continued to promote co-development and co-production with foreign Original Equipment Manufacturers (OEMs), seeking to ensure that foreign investment contributes not only capital but also advanced technology and manufacturing capabilities.

Policy reforms and increased private sector involvement have also strengthened India’s defence industrial base. With 16 DPSUs, around 500 licensed companies, and nearly 17,000 MSMEs, the sector has expanded rapidly. Defence industrial licences have more than tripled since 2015, supporting innovation and the country’s self-reliance goals.

Source: Ministry of Defence, Govt. of India / Press Information Bureau (pib.gov.in)

Emerging Issues

Despite its broader vision, DAP 2020 continues to face significant implementation challenges.

Procedural complexity remains a major concern. The Ministry of Defence’s 2025 review identified the need to simplify procurement categories, streamline field trials, strengthen post-contract management, refine Fast Track Procurement (FTP) procedures, and better integrate emerging technologies such as artificial intelligence. The review itself suggests that, five years after its introduction, the objective of simplifying defence acquisition has not yet been fully realised (PIB, 2025).

Balancing self-reliance with operational readiness presents another challenge. While the Armed Forces require timely access to critical capabilities, developing advanced defence systems domestically demands sustained investment, skilled manpower, and a mature research and industrial ecosystem that India is still building. If domestic production falls short in terms of quality or delivery schedules, restrictive import policies could slow military modernisation and create capability shortfalls.

Policy reforms alone are also insufficient to reduce import dependence. Structural constraints including fragmented supply chains, technology gaps, limited testing infrastructure, and inadequate long-term investment continue to affect the growth of the domestic defence industry. The Ministry of Defence’s releasing a draft of DAP 2026, indicates that the acquisition framework is still evolving rather than being considered a finished model.

Way Forward

The evolution of India’s defence acquisition framework suggests that reform must remain a continuous process, adapting to changing strategic requirements, technological advances, and industrial capabilities.

The first priority should be further procedural simplification through clearer procurement categories, faster field trials, and greater use of digital technologies and data-driven decision-making to reduce delays across the acquisition cycle.

Second, the focus should extend beyond procurement towards life-cycle capability management by promoting indigenous production of spares, performance-based logistics, and structured upgrade programmes. Such measures would improve equipment availability while reducing long-term dependence on foreign suppliers.

Third, sustained support for MSMEs, startups, and research institutions remains essential. Predictable procurement pipelines, faster testing and certification, and stronger collaboration between government, industry, academia, and the Armed Forces would help bridge existing technology and manufacturing gaps while accelerating innovation.

Fourth, the implementation of import restrictions should remain aligned with domestic industrial readiness through phased indigenisation rather than fixed timelines alone. This would ensure that the pursuit of self-reliance does not compromise operational preparedness.

Finally, defence acquisition should be integrated more closely with India’s long-term national security strategy. Stronger alignment between capability planning, budget allocation, and acquisition priorities would improve resource utilisation, enhance policy coherence, and support the development of a resilient and self-reliant defence ecosystem.

References

Ministry of Defence. (2016). Defence procurement procedure 2016. Government of India. https://www.mod.gov.in/sites/default/files/dppm.pdf_0.pdf

Ministry of Defence. (2020). Defence acquisition procedure 2020 (incorporating amendments up to November 2021). Department of Defence, Government of India. https://www.mod.gov.in/dod/sites/default/files/DAP2030new.pdf

Press Information Bureau. (2020, September 28). Raksha Mantri Shri Rajnath Singh unveils Defence Acquisition Procedure–2020. Ministry of Defence, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1659746

Press Information Bureau. (2021, December 16). Reforms in defence sector propelling private sector participation (2014–2021) [Fact sheet]. Ministry of Defence, Government of India. https://www.pib.gov.in/factsheetdetails.aspx?id=148594

Press Information Bureau. (2022a, April 7). Landmark policy decision to indigenise 101 more weapons and platforms to speed up “Aatmanirbharta” in defence. Ministry of Defence, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1814446

Ministry of Defence, Government of India. (2022, April 20). MoD utilises 65.50 per cent of Capital Acquisition Budget on domestic procurement in FY 2021-22 [Press release]. Press Information Bureau. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1818229

Press Information Bureau. (2022b, July 25). FDI in defence sector. Ministry of Defence, Government of India. https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1844610

Press Information Bureau. (2025, March 24). Make in India powers defence growth. Ministry of Defence, Government of India. https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2114546&reg=48&lang=2

Ministry of Defence, Government of India. (2025, March 29). Make in India powers defence growth [Press release]. Press Information Bureau. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2116612

Press Information Bureau. (2025, June 19). MoD initiates comprehensive review of Defence Acquisition Procedure 2020 to align with national reforms. Ministry of Defence, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2137680

Press Information Bureau. (2026, June 17). The defence decade: Enhanced capability, greater capacity, and stronger credibility. Ministry of Information and Broadcasting, Government of India.

https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=158925&ModuleId=3&reg=1&lang=1

Cowshish, A. (2020, November 20). Decoding Defence Acquisition Procedure 2020 (Issue Brief). Manohar Parrikar Institute for Defence Studies and Analyses. https://idsa.in/publisher/issuebrief/decoding-defence-acquisition-procedure-2020

Behera, L. K. (2021). Defence acquisition procedure 2020: Imperatives for further reforms (ORF Issue Brief No. 440). Observer Research Foundation. https://www.orfonline.org/public/uploads/posts/pdf/20230525222943.pdf

About the Contributor

Ninchen Tamang is a Research & Editorial intern at Impact and Policy Research Institute (IMPRI). She holds a Master’s degree in Political Science, with primary research interests spanning geopolitics, international relations, foreign policy, and South Asian studies.

Acknowledgement

The author extends sincere gratitude to the IMPRI team for their expert guidance and constructive feedback throughout the process.

Reviewed by Madhuritha D and Shivali Yadav

Disclaimer: All views expressed in the article belong solely to the author and do not necessarily represent the views or policies of the organisation.