U.S. Chamber of Commerce
09/16/2024 | Press release | Archived content
India's Defense Acquisition Procedure: Policy Recommendations
September 2024
Since its introduction in 2020 in place of the earlier Defense Procurement Procedure (DPP), the Defense Acquisition Procedure (DAP) has enabled a transformation in India's military industry, in support of the country's national security and economic objectives. As the Ministry of Defense (MoD) begins considering the next amendment to the DAP, the time is ripe for India's defense sector to take the next step in its transformation. Accordingly, the U.S.-India Business Council (USIBC) and The Asia Group (TAG) conducted a series of consultations and other engagements with industry stakeholders from India, the United States, the United Kingdom, and the European Union, to generate a set of policy recommendations for the MoD's consideration.
The following paper summarizes the recommendations that resulted from this process, reflecting areas of consensus across the diverse group of stakeholders. Some of the ideas are beyond the scope of the DAP. However, they, along with the ideas that are within the DAP's scope, are aimed at further enhancing India's military preparedness and defense industrial capabilities, through closer industrial collaborations and integration with trusted like-minded partners.
International markets provide an important way to achieve scale as India seeks to build upon its defense industrial capability. India's defense exports grew by 78 percent between April-June 2023 and April- June 2024, from INR 3,885 crore to INR 6,915 crore, respectively. India's export markets cover over 90 countries across regions: Southeast Asia (e.g., the Philippines), West Asia (e.g., Armenia), Europe (e.g., France), and North America (the United States). The United States now accounts for around 50 percent of India's defense exports. The volumes of India-U.S. defense exports are poised to grow further, thanks to the Security of Supply Agreement (SOSA) signed during Raksha Mantri Rajnath Singh's official visit to the United States in August 2024.
India is now well positioned to explore policies that mutually support industrial capability for national defense, resilient supply chains, and exports, and to enable greater cost-efficiencies and global competitiveness through scale.
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About the authors
Pushan Das is Director for Aerospace & Defence at the U.S.-India Business Council
Gopal Nadadur is Vice President for South Asia at The Asia Group