New Delhi: To meet the evolving needs of the armed forces and streamline its revenue procurement process, the Ministry of Defence has approved the newly updated Defence Procurement Manual (DPM) 2025—last revised in 2009. Defence Minister Rajnath Singh took to X Sunday to announce the approval, adding that the budget for revenue procurement in the 2025-26 financial year is estimated at around Rs 1 lakh crore.
The manual outlines how the armed forces and organisations under the ministry acquire goods and services crucial for their day-to-day operations and operational readiness under the revenue head—unlike the Defence Acquisition Procedure (DAP), which focuses on capital procurement.
The updated edition of DPM introduces a range of reforms aimed at improving efficiency, speeding up decision-making and reducing bureaucratic delays. It also includes a variety of measures to make it easier for private companies to participate in defence projects.
A statement from the government Sunday said, “The issues related to level playing field between various players have been addressed by incorporating suitable provisions in the revised manual. The requirement of obtaining No Objection Certificate from some DPSUs (Defence Public Sector Undertakings) before going for open bidding has been dispensed with and tenders will be awarded purely on a competitive basis.”
Earlier, DPSUs had the power to block open bidding by withholding No Objection Certificates (NOCs). Subsequently, the revised rules remove this requirement, allowing contracts to be awarded entirely through competitive tenders. This will make the process faster, more transparent, and fairer for both public and private suppliers.
ThePrint had reported in March that the ministry had approved a proposal to nearly halve procurement timelines, an initiative expected to feature in the updated DAP later this year. Other changes under consideration back then included removing outdated practices, such as product reservation for defence PSUs and streamlining procedural bottlenecks that have historically slowed down defence acquisitions.
Moreover, Defence Secretary Rajesh Kumar Singh has also been batting to move away from the traditional nomination-based, cost-plus procurement model—historically dominated by PSUs—towards competitive bidding to create a level playing field.
The updated DPM also includes a provision to not levy Liquidity Damages (LD) during the development phase. “Once a prototype is developed, a minimal 0.1% LD will apply, while the maximum has been capped at 5%, rising to 10% only in cases of significant delays,” the government statement read, adding that this change will “result in incentivising those suppliers who genuinely try to meet the deadline but make the supplies with little delay”.
This reduces financial risks for companies during testing and prototype stages, encouraging private firms, start-ups and other non-public sector players to participate in defence projects and experiment with new technologies.
Additionally, the new manual also provides stability for suppliers through guaranteed orders. According to the ministry, “a provision has been made to provide assured guarantee of orders in terms of quantity, up to five years and beyond that up to another five years in special circumstances”.
Another key reform is the empowerment of Competent Financial Authorities (CFAs) at the field level. “Competent Financial Authorities (CFAs) have been empowered to take decisions in consultation with their financial advisors in respect of granting extension in delivery period irrespective of quantum of delay without approaching higher authorities,” the statement read.
This means that local officers can make key financial decisions quickly, instead of sending files up the chain of command, which helps speed up procurement and reduce bureaucratic delays.
The government also said the updated manual addresses the challenges of repairing and maintaining complex equipment. To minimise downtime and keep aircraft, warships and other platforms operational, it introduces a 15 percent upfront provision for repair, refit and maintenance work.
Further, to enable the defence ministry to procure specialised equipment more quickly through a simplified bidding process, the manual further permits “Limited Tendering” for contracts up to Rs 50 lakh, and beyond that only in exceptional cases.
Besides reducing bureaucratic delays and improving efficiency, the government said, the updated DPM also includes a new chapter to promote self-reliance, reduce dependence on imported equipment, and encourage Indian companies and research institutions to develop critical defence technologies domestically.
(Edited by Mannat Chugh)
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