**Executive Summary:**
On September 14, 2025, the Raksha Mantri approved the Defence Procurement Manual (DPM) 2025, a revised document to streamline revenue procurement processes for the Services, promote domestic industry, and encourage innovation. The manual aims to achieve self-reliance and foster jointness among the three Services by expediting decision-making and ensuring timely resource availability. It aligns with the Ministry of Finance guidelines and incorporates measures to boost Aatmanirbhar Bharat.
**Key Points / Main Content:**
* **General Provisions:**
* DPM 2025 streamlines and simplifies revenue procurement in the Ministry of Defence.
* It caters to the emerging requirements of the Armed Forces in modern warfare.
* The manual aims to achieve self-reliance in fulfilling the needs of the Armed Forces under the Revenue Head Operations Sustenance Segment.
* It fosters jointness among the three Services, maintaining high military preparedness through expedited decision-making.
* The manual ensures the timely availability of resources to the Armed Forces at appropriate cost.
* It incorporates the updated provisions of the Manual for Procurement of Goods issued by the Ministry of Finance.
* The DPM lays down the guiding principles and provisions for all revenue procurements in the Ministry valuing around Rs 1 lakh crore for the current Financial Year.
* **Promoting Self-Reliance and Innovation:**
* A new chapter promotes self-reliance through innovation and indigenisation.
* It supports the indigenisation of defence items/spares through in-house designing and development.
* Collaboration is encouraged between public/private industries, academia, IITs, IISc, and other private institutions.
* Many provisions of developments contracts have been relaxed.
* **Financial and Contractual Reliefs:**
* No Liquidity Damages (LD) will be levied during the development phase.
* Minimal LD (0.1%) will be levied post-prototype development.
* The maximum LD to be levied has been lowered to 5%, with a maximum of 10% only in cases of inordinate delays.
* Assured guarantee of orders in terms of quantity is provided, up to five years initially and potentially up to another five years under special circumstances.
* The Services will provide support through handholding, sharing technical know-how and existing equipment to ensure successful development.
* Competent Financial Authorities (CFAs) at field level/lower formations are empowered to expedite decision-making and ensure timely payment to suppliers.
* CFAs are empowered to grant extensions in delivery periods without approaching higher authorities.
* The concept of collegiate decision-making has been further strengthened.
* **Procurement Process Enhancements:**
* CFAs have the delegated power to increase bid opening dates up to a certain limit without referring the matter to their Financial Advisors to increase participation.
* An upfront provision of 15% in growth of work has been extended for repair/refit/maintenance activities.
* Limited Tendering can be used for goods specialised in nature and available with limited sources, up to Rs 50 lakh, and beyond that in exceptional circumstances.
* Procurement on a Propriety Article Certificate basis is allowed for proprietary items, subject to efforts to identify alternative sources.
* Adequate provisions streamline procedures for Government-to-Government agreement-based procurements.
* The requirement of obtaining a No Objection Certificate from some DPSUs before open bidding has been dispensed with.
**Impact Analysis**
* **Armed Forces:**
* *Impact:* Ensured timely availability of requisite resources, fostering jointness among the three Services, and helping in maintaining the highest level of military preparedness.
* *Action Required:* Familiarize themselves with the streamlined revenue procurement processes and utilize the provisions for expedited decision-making.
* **Domestic Industry (Private Players, MSMEs, Startups):**
* *Impact:* Enhanced participation in the defence sector, access to supportive financing options, relaxed penalty clauses, and opportunities for innovation and indigenisation.
* *Action Required:* Actively participate in the defence manufacturing ecosystem, leverage the relaxed provisions for development contracts, and explore opportunities for collaboration with DPSUs and academia.
* **Defence Public Sector Undertakings (DPSUs):**
* *Impact:* Increased opportunities for collaboration and technology transfer, and a boost in research and development through enabling provisions.
* *Action Required:* Adapt to the competitive bidding environment, actively engage in collaborative projects, and focus on innovation and technology development.
* **Ministry of Defence (MoD):**
* *Impact:* Streamlined and simplified revenue procurement processes, reduced administrative burdens, and enhanced transparency and accountability.
* *Action Required:* Implement the provisions of DPM 2025, monitor its effectiveness, and make necessary adjustments to ensure its objectives are met.
Key Entities Referenced
Ministry of Defence: The Indian government ministry responsible for the defence of India and its armed forces. It oversees defence procurement.
Defence Procurement Manual 2025: A revised document by the Ministry of Defence to streamline the revenue procurement process for the Services, enable domestic industry, and promote innovation.
Raksha Mantri Shri Rajnath Singh: The Defence Minister of India who approved the Defence Procurement Manual 2025.
Armed Forces: The military forces of India, including the Army, Navy, and Air Force, which will benefit from the streamlined procurement process.
Defence Public Sector Undertakings: Government-owned enterprises involved in defence manufacturing and development. (DPSUs)
Aatmanirbhar Bharat: A Government of India initiative for self-reliance, particularly in defence manufacturing and technology.
Ministry of Finance: The Indian government ministry responsible for financial regulations, including the Manual for Procurement of Goods, with which the Defence Procurement Manual has been aligned.
Indian Institutes of Technology: Refers to a group of autonomous public technical universities in India. (IITs)
Ministry of Defence
Raksha Mantri approves Defence Procurement
Manual 2025
The revised document to expedite revenue
procurement for the Services, enable domestic
industry with simple processes, promote innovation &
support enterprise
Working capital issues faced by industries eased by
providing supportive financing options & relaxing
unnecessary penalties
R&D by industry, academia & DPSUs to get a boost
through several enabling provisions
Posted On: 14 SEP 2025 6:39PM by PIB Delhi
Raksha Mantri Shri Rajnath Singh has approved the Defence Procurement Manual (DPM) 2025 to further
streamline, simplify, enable & rationalise the revenue procurement process in the Ministry of Defence and
cater to the emerging requirements of the Armed Forces in the era of modern warfare. The new manual is
aimed at achieving self-reliance in fulfilling the needs of the Armed Forces under Revenue Head (Operations
& Sustenance Segment). It will foster jointness among the three Services and help in maintaining the highest
level of military preparedness through expeditious decision making. It will ensure timely availability of
requisite resources to the Armed Forces and at appropriate cost.
Ease of doing business has been further strengthened in the document, which aims to boost Aatmanirbharta in
defence manufacturing & technology. The objective is to utilise the potential, expertise, and capability of the
domestic market in defence sector by ensuring active participation of private players, MSMEs, start-ups etc.
along with the well-established Defence Public Sector Undertakings (DPSUs).
Procurement of goods and services by the Defence Services and of other organisations under Ministry of
Defence is regulated by DPM, which was last promulgated in 2009. This Manual was under revision in the
Ministry in consultation with the Armed Forces and other stakeholders.
The DPM lays down the guiding principles and provisions for all revenue procurements in the Ministry
valuing around Rs 1 lakh crore for the current Financial Year. There has been a pressing need for this manual
to be aligned with latest developments in the field of public procurement duly ensuring the use of technology
in procurement with utmost fairness, transparency, and accountability.The revised document has been aligned with the updated provisions of the Manual for Procurement of Goods
issued by the Ministry of Finance. As a major thrust to Aatmanirbhar Bharat, a new chapter has been included
to promote self-reliance through innovation and indigenisation. This will help in the indigenisation of defence
items/spares through in-house designing and development in collaboration with public/private industries,
academia, IITs, IISc & other private institutions of repute by utilising the talent of young bright minds.
The concerns of the individuals/industry who want to venture into this sector has been addressed by relaxing
many provisions of developments contracts. Provision has been introduced not to levy Liquidity Damages
(LD) during development phase. Minimal LD @ 0.1% will be levied post development of the prototype.
Maximum LD to be levied has been lowered to 5%, and in case of inordinate delays only, maximum LD will
be 10%. This will result in incentivising those suppliers who genuinely try to meet the deadline but make the
supplies with little delay.
In addition, 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 provision has been
introduced to provide requisite support through handholding by the Services in terms of sharing of technical
knowhow, existing equipment etc. with the aim to ensure successful development.
The revised document will empower the Competent Financial Authorities at field level/lower formations,
expedite decision making, avoid movement of files between lower-higher level and ensure timely payment to
the suppliers. Competent Financial Authorities (CFAs) have been empowered to take decision in consultation
with their financial advisors in respect of granting extension in delivery period irrespective of quantum of
delay without approaching higher authorities.
The concept of collegiate decision making has been further strengthened in line with existing practice being
followed in case of acquisition of capital assets. The CFAs have now been delegated power to increase bid
opening dates up to a certain limit in case there is lack of participation without referring the matter to their
Financial Advisors to increase participation.
In view of the complexity of repair/refit/maintenance of various aerial and naval platforms, an upfront
provision of 15% in growth of work has been extended for all such activities to reduce the downtime of
equipment and ensuring its availability for operations with minimum delay. To fulfill the need of those goods
which are specialised in nature and available with limited sources as per the new provisions Limited
Tendering can be resorted to for value up to Rs 50 lakh, and beyond that in exceptional circumstances. In case
of proprietary items, provision for procurement on Propriety Article Certificate basis has been kept subject to
parallel efforts for exploring the market for identification of alternative sources.
To facilitate procurements based on Government-to-Government agreements, adequate provision has been
included to streamline the procedure being followed in such special arrangements adopted for high value
procurements. 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 before going for open bidding has been dispensed with and tenders will be
awarded purely on competitive basis.
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VK/Savvy
(Release ID: 2166559)