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Defence Procurement: DPP, Offsets, and Make in India
July 19, 20265 min read
Defence Procurement: DPP, Offsets, and Make in India
Introduction
India's defence procurement framework has evolved significantly from a purely import-dependent model to one that emphasizes indigenisation, strategic partnerships, and export competitiveness. The Defence Procurement Procedure (DPP), offset policies, and the Make in India initiative constitute the three pillars of this transformation. With a defence budget exceeding ₹6.2 lakh crore (2024-25) and the world's second-largest standing army, India's procurement decisions have strategic, industrial, and fiscal implications.
Defence Procurement Procedure (DPP)
Evolution of DPP
| Version | Year | Key Features |
|---|---|---|
| DPP-2002 | 2002 | First comprehensive procurement manual; categorised by Buy (Indian/G2G/Global) |
| DPP-2006 | 2006 | Offset policy introduced (30% for contracts > ₹300 crore); Indigenous Design category added |
| DPP-2008 | 2008 | Buy and Make (Indian) category formalised; emphasis on technology transfer |
| DPP-2011 | 2011 | Indigenous content requirement increased; fast-track procurement introduced for urgent needs |
| DPP-2013 | 2013 | Offset banking allowed; maintenance category added; lifecycle cost evaluation introduced |
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