The Emergency Procurement for Indian army

The army has made three tranches of emergency procurement (EP) in the last few years.

The army is preparing for the fourth round of EP, which will be entirely from the domestic industry.
The Army chief, Gen. Manoj Pande, said while speaking on the sidelines of the DefExpo2022.

What?
- Emergency Procurements are done to address critical operational requirements.
- In August this year (2022) the Defence Acquisition Committee (DAC) granted Emergency Procurement powers to the armed forces to buy from ‘Indian vendors’, weapon platforms and munitions urgently needed by them.
  - The Defence Acquisition Committee(DAC) is Headed by the defence minister, with the Chief of Defence Staff, the three Service chiefs and Secretaries, and other high-ranking officials as members.
Origin:
- In 2001, the Indian Ministry of Defence (MoD) introduced the Fast Track Procurement (FTP) process to meet the urgent operational needs of the armed forces.
- The Fast Track Procedures may also be applied for cases where timelines are seen to be adversely impacting the capability and operational preparedness.
- Fast track procurements were resorted to in the aftermath of Chinese aggression along the LAC in the summer of 2020.
Objective:
- The stated aim of the Fast Track Procedure is to ensure expeditious procurement for urgent operational requirements of the Armed Forces.
The Fast Track Procedure (FTP) category:
- FTP acquisitions can be categorised as under.
  - Procurement of equipment already inducted into Service.
  - Procurement of new equipment.
  - Procurement of weapon system/platform, which is in service in a friendly foreign country and is available for transfer/lease or sale.

Origin:
- The first Defence Procurement Procedure (DPP) was promulgated in 2002.
Objectives:
- It has since been revised periodically to provide impetus to
  - The growing domestic industry and
  - Achieve enhanced self-reliance in defence manufacturing.
DAP 2020:
- The armed forces acquire capital assets according to the Defence Acquisition Procedure (DAP) 2020, which was introduced in September 2020.
- Along with buying equipment from Indian or international players, DAP 2020 also introduced a chapter on leasing equipment for a limited time.
- Hiring for shorter durations under the new powers will allow the forces to plug immediate gaps.

Reservations for Indigenous firms:
- The policy reserves several procurement categories for indigenous firms.
- DAP 2020 defines an “Indian vendor” as a company owned and controlled by resident Indian citizens, with foreign direct investment (FDI) not more than 49 per cent.
New Buy (Global–Manufacture in India) category:
- This stipulates indigenisation of at least 50 per cent of the overall contract value of a foreign purchase bought to build it in India with technology transfer.
Greater indigenous content:
- It promotes greater indigenous content in arms and equipment of the military procures, including equipment manufactured in India under licence. In most acquisition categories, DAP-2020 stipulates 10 per cent higher indigenisation than DPP 2016.
Import embargo list:
- The “import embargo list” of 101 items that the government promulgated last month has been incorporated explicitly into DAP 2020. (An embargo is a government order restricting commerce with a specified country or exchanging specific goods.)
Offset liability:
- The government has decided not to have an offset clause in the procurement of defence equipment if the deal is done through an inter-government agreement (IGA), government-to-government or an ab initio single vendor.
- The offset clause requires a foreign vendor to invest a part of the contract value in India.

Content Source: The Hindu