Evaluating the impact of Defence Acquisition Procedure 2020: Success stories and Challenges in India’s Defence Acquisition

Introduction:

This is a transformation period for the world’s largest armed forces Indian Defence sector-as the central government is aiming for ‘Aatmanirbhar Bharat’ (self-reliance) and in line with this vision, the interim union budget for 2024-25 is expected to allocate INR 1.72 lakh crore towards modernization and infrastructure development—a 9.4% increase over the previous year. This strategic shift emphasizes enhancing indigenous manufacturing and research capabilities. The government has set ambitious targets, aiming to achieve $26 billion in aerospace and defence manufacturing by 2025, with $5 billion of that designated for exports.[1].

The Defence Acquisition Procedure 2020 (“DAP 2020”) plays a pivotal role in shaping the trajectory of growth in this sector by aiming at indigenous industry power through the initiatives of Make in India. DAP 2020, in particular, provides a structured framework that prioritizes indigenous vendors, enhances local content, and streamlines acquisition processes. Collectively, these measures are designed to create a transparent, competitive, and supportive environment for defence manufacturing, enabling India to position itself more effectively in the global defence market.

Case studies for successful implementation of DAP 2020 in India:

DAP 2020 has been strategically aligned with the Government’s vision of Atmanirbhar Bharat and aiming to strengthen and empower the Indian domestic industry through Make in India initiative with the ultimate aim of transforming India into a global manufacturing hub.

The Akash missile battery, an indigenously developed missile system, has recently been approved for induction by the Union Cabinet, marking a significant enhancement to India’s missile defence capabilities. With a range of 25 kilometres, it is designed to neutralize aerial threats such as cruise missiles, thereby strengthening the Indian Air Force’s air defence capabilities. Developed under the DAP 2020, the missile embodies India’s vision of self-reliance, which is devised to reduce imports of foreign defence. Furthermore, it has contributed to the growth of India’s defence export ecosystem, which has traditionally been limited to smaller components. “India is today at the threshold of becoming a significant player in defence exports and has set a target to achieve $5 billion in Defence Export, which will not only complement strengthening strategic ties with allied nations but is part of the overall synergic growth,” Defence Minister Shri Rajnath Singh said.[2]

The Ugram assault rifle, another part of the DAP 2020 initiative, was developed in cooperation with Dvipa Armour India, under the aegis of the Defence Research and Development Organisation.  Unveiled on January 8, 2024, This rifle has a 7.62 x 51mm caliber and is intended for use by the Indian Armed Forces, paramilitary forces, and police forces. It weighs less than 4 kg and has an effective range of up to 500 meters.[3] Ugram was developed within the span of just 100 days. This achievement showcases the efficiencies of DAP 2020, which encourages indigenous manufacturing and supports ‘Atmanirbhar Bharat’ initiative, aimed at fostering self-reliance.

Under DAP 2020, AK-203 is an Indo-Russian joint venture executed by Indo-Russian Rifles Private Limited (IRRPL) on assault rifles The contract involves the production of over 670,000 rifles with substantial technology transfer.[4] The initial batch of 70,000 rifles will be imported from Russia, with local manufacturing set to commence in 2025.,

The procurement of BrahMos missiles from BrahMos Aerospace Private Limited amounting to ₹19,518.65 crore, will strengthen the operational capabilities of the Indian Navy while contributing to jobs within related industries to make India a global hub for defence manufacturing.[5] BrahMos Aerospace’s success is closely aligned with the Defence Acquisition Procedure (DAP) 2020, which promotes indigenization and fosters a robust industrial base in line with the government’s “Make-in-India” initiative.

Challenges of Defence Acquisition procedure 2020:

The DAP 2020 in India is designed to streamline the procurement of military equipment while promoting self-reliance and ensuring transparency. However, despite its objectives, DAP 2020 encounters several significant challenges that impede its effectiveness and raise critical concerns among analysts and military stakeholders. These challenges are[6]:

1) Ambiguous Security Policy Framework:

One of the most significant criticisms of DAP 2020 is its lack of a clearly defined National Security Strategy. A well-defined strategy serves as the foundation for developing and planning military capabilities. However, the armed forces frequently find themselves relying on ambiguous directives from the Raksha Mantri (Minister of Defence) regarding operational guidance. The absence of a comprehensive guiding framework is arguably the primary reason for the lag in India’s military modernization, as it impedes informed decision-making and hinders the establishment of a coherent, long-term policy for effective planning.

2) Flawed Defence Planning:

The current process is based on a three-tiered structure with a long-term integrated capability development plan, meant to guide military procurement over ten years. However, this planning process lacks comprehensiveness, with its major focus limited to the armed forces and other vital structures of the Ministry of Defence like Indian Coast Guard and numerous research and development organizations. This results in capability and coordination gaps.

Additionally, the presence of multiple agencies performing overlapping tasks contributes to confusion and impedes the planning process. The Defence Planning Committee, the Integrated Defence Staff, and bodies like those always tend to work for conflicting roles, and it becomes difficult to create a unified approach. Moreover, Financial considerations are inadequately addressed, with unrealistic budget projections exacerbating the issue, For example, heavy expenditure on the area of defence pensions is often ignored, which undermines the operational capabilities of the armed forces.

 3) Absence of a Dedicated Defence Capability Acquisition Organisation (DCAO):

There is no definite DCAO to oversee the acquisition process at large. Currently, it is already governed by various authorities: like the Defence Acquisition Council and other procurement boards. This fragmented form of government will make it challenging to enforce speedy decisions. In 2017, the committee proposed a clean, standalone DCAO to rationalize the acquisition processes, integrate procurement with the research and development phases, and have better control over them. However, the failure to implement this recommendation has left the procurement process disorganized, resulting in delays and inefficiencies.

4) Procedural Complexities:

The processes though updated numerous times since 2002 still seem cumbersome and bureaucratic. The multi-stage acquisition cycle is poorly defined with too much red tape. Unrealistic Service Qualitative Requirements and unqualified resources in certain areas such as financial management create complexities in the process. This further leads to delay, inefficiency, and complicated contract implementation which can seriously hamstring a procurement effort.

5) Budgetary Constraints:

Perhaps the most pressing challenge facing DAP 2020 is the ongoing budget shortfall for defence acquisition. The gap between the armed forces’ projected demands and actual budget allocations has increased significantly, from ₹23,014 crore in 2010-11 to ₹1,01,678 crore in 2022-23. This widening gap indicates a significant mismatch between strategic requirements and available resources. The proposed Defence Modernisation Fund, although intended to address some of these financial challenges, lacks the necessary corpus to meet projected needs. For example, the expected shortfall for capital and revenue expenditures between 2023-24 and 2025-26 is projected to be around ₹10 lakh crore, underscoring the inadequacy of current funding levels[7].

Conclusion:

The DAP 2020 is a step towards self-reliance in defence manufacturing, and it is a ‘Start-up India, Standup India’ from the government’s ‘Atmanirbhar Bharat.’ Examples of such case studies are the Akash missile system and the Ugram assault rifle. Substantive challenges continue to underlie the structure, including an ambiguous security policy, faulted planning processes, and procedural complications that encumber effective implementation. Budgetary constraints pose a crucial threat to the attainment of strategic goals. Efforts must be concentrated on overcoming some of these challenges so that DAP 2020 can progress into its full ambit and India can emerge as a competitive player in the international defence market while ensuring enlarged national security.

[1]Invest India. (n.d.). Defence manufacturing. Available at: https://www.investindia.gov.in/sector/defence-manufacturing [Accessed 27 Sep. 2024].

[2] Indbiz, 2023. Indigenously developed Akash missile system approved by Cabinet. Available at: https://indbiz.gov.in/indigenously-developed-akash-missile-system-approved-by-cabinet/#:~:text=The%20Akash%20missile%20system%20which,use%20by%20the%20Union%20Cabinet [Accessed 27 September 2024].

[3] DRDO, 2024. Newsletter. February 2024, Volume 44, Issue 2. Available at: https://www.drdo.gov.in/newsletter [Accessed 27 September 2024].

[4] Finabel, 2022. Russia’s Rosoboronexport in visit to DefExpo India 2022 for joint production of AK-203 assault rifles. Available at: https://finabel.org/russias-rosoboronexport-in-visit-to-defexpo-india-2022-for-joint-production-of-ak-203-assault-rifles/ [Accessed 27 September 2024].

[5] Press Information Bureau, 2024. Another major boost to Aatmnirbharta in defence: Ministry of Defence signs five major capital acquisition contracts worth Rs 39,125.39 crore. Available at: https://pib.gov.in/PressReleasePage.aspx?PRID=2010528 [Accessed 27 September 2024].

[6] Vivekananda International Foundation, 2022. Challenges in defence acquisitions. VIF India. 26 August. Available at: https://www.vifindia.org/article/2022/august/26/challenges-in-defence-acquisitions [Accessed 27 September 2024].

[7] Fifteenth Finance Commission, 2021. Report of the Fifteenth Finance Commission. Available at: https://fincomindia.nic.in/ShowContentOne.aspx?id=9&Section=1 [Accessed 27 September 2024]

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