Defence Acquisition Procedure 2020 (DAP 2020)

Defence Acquisition Procedure 2020 (DAP 2020) is the comprehensive policy document governing how India's Ministry of Defence procures capital equipment, aircraft, warships, weapons systems, vehicles, communications systems, and related defence platforms. It replaces the earlier Defence Procurement Procedure (DPP 2016) and is the primary instrument for India's stated goal of achieving Atmanirbharta (self-reliance) in defence.

What is DAP 2020 in government procurement?

DAP 2020 establishes a tiered category system that determines which procurement route the Ministry of Defence must use, with a priority ordering from most domestically favoured to least:

Buy (Indian - IDDM): The highest priority category. Procurement from an Indian vendor of platforms that are Indigenously Designed, Developed, and Manufactured, with a minimum 50 percent indigenous content (IC). This category is reserved for products that Indian defence companies have designed and developed themselves.

Buy (Indian): From an Indian vendor, with a minimum 50 percent IC. The product need not be indigenously designed, it can be license-manufactured or otherwise produced in India at the required IC threshold.

Buy and Make (Indian): Initial import of a small quantity, followed by Transfer of Technology (ToT) to an Indian company for licensed manufacture. The Indian vendor must be a private sector or DPSU (Defence PSU) entity.

Buy and Make: Import of an initial batch, followed by progressive indigenous manufacture. The IC requirement increases over the contract period.

Buy (Global): International competitive bidding with no Indian content preference. Requires formal justification that no higher-priority category was feasible.

Each category shift down the priority order requires a formal Acceptance of Necessity (AoN) justification and approval from progressively higher levels of the defence ministry hierarchy.

DAP 2020 also introduced the concept of the Defence Investor Cell, a single window for industry queries, and formalized the role of private sector companies including startups and MSMEs in defence supply chains.

The procurement cycle for capital defence acquisitions is long, anywhere from 5 to 15 years from AoN to contract signing for complex platforms. The process involves needs assessment, categorization, Request for Information, Draft Request for Proposal, industry interactions, final RFP, technical trials, field evaluation, final commercial bids, and inter-ministerial negotiations.

Why it matters for bidders

DAP 2020 is the entry point for any company that wants to supply defence equipment to the Indian government. Indian companies have a structural advantage under the category priority system, for most categories, only Indian vendors (in DAP terms, a company incorporated in India with Indian management control) are eligible, and minimum IC requirements ensure that the manufacturing actually happens in India.

For private sector defence companies, the iDEX (Innovations for Defence Excellence) scheme under DAP 2020 provides a simplified fast-track mechanism for innovative startups and MSMEs to supply prototype-stage technologies to the Services without the full AoN-to-contract cycle.

Understanding the IC calculation, what counts as indigenous content, how sub-vendor certificates are aggregated, and how IC is verified through audits, is essential for companies building defence supply chains. Misrepresentation of IC leads to a blacklisting.

Example

The Indian Army identifies a requirement for a new generation of infantry combat vehicles. The defence ministry categorizes the case as Buy (Indian-IDDM) because Indian defence companies have been developing armoured vehicle platforms domestically. An RFI is issued to gauge market readiness. Three Indian vendors confirm capability. A Draft RFP is shared for industry feedback. The final RFP specifies a minimum 50 percent IC, requires successful technical trials at CVRDE, and mandates a Performance Security of 10 percent of contract value. The contract is signed for 1,200 vehicles worth Rs 12,000 crore over eight years.

Key rules / thresholds

• Category priority (highest to lowest): Buy (Indian-IDDM) > Buy (Indian) > Buy and Make (Indian) > Buy and Make > Buy (Global).
• Minimum indigenous content: 50 percent for Buy (Indian-IDDM) and Buy (Indian); varies for other categories.
• Offset policy applies to Buy (Global) contracts above Rs 2,000 crore: 30 percent of contract value must be discharged as offset investment in Indian defence industry.
• Startup exemptions from prior experience and turnover under iDEX for defence innovation procurement.