SOURCE: AFI
The Indian Army has called for significant amendments to the Defence Procurement Manual (DPM), highlighting a systemic bias favoring Defence Public Sector Undertakings (PSUs) that hampers fair competition with private industry. Speaking at a PHD Chambers of Commerce and Industry (PHDCCI) event on April 21, 2025, Lt Gen Amardeep Singh Aujla, Master General Sustenance, emphasized the need for a common level playing field to realize the goals of Aatmanirbhar Bharat (self-reliant India) in the military domain.
The proposed changes, reported by The Hindu BusinessLine, aim to address procedural frictions, encourage private sector innovation, and align procurement with India’s ambitions under the “Make in India” initiative and the Indigenously Designed, Developed, and Manufactured (IDDM) framework.
The DPM, under review by the Ministry of Defence (MoD) since 2021, governs the acquisition of revenue items such as vehicles, equipment, and ammunition for the armed forces. The Indian Army’s critique centers on the manual’s structural preference for PSUs like Bharat Electronics Limited (BEL) and Bharat Dynamics Limited (BDL), which often secure contracts despite outdated solutions or higher costs. Lt Gen Aujla pointed out that the DPM’s rigid Lowest Cost (L1) procurement system prioritizes price over capability, sidelining private firms offering advanced technologies, such as digital or predictive maintenance tools.
Industry representatives echoed these concerns. Neeraj Gupta, Managing Director of MKU Ltd, noted that Micro, Small, and Medium Enterprises (MSMEs) with cutting-edge solutions are rarely shortlisted, as PSUs benefit from entrenched procurement norms. Gupta highlighted additional barriers, including cumbersome documentation, stringent inspection processes, and delayed payments, which deter private investment in the defence sector. “Only then can the sector fully align with ambitions of Make in India, strategic partnership, and the IDDM framework,” he stated, urging reforms to foster long-term vendor development.
A key recommendation from the Army is the introduction of an “apportionment” concept in tendering. This approach would allow multiple bidders offering comparable quality products to share contracts, particularly in high-volume procurements, if the L1 bidder lacks sufficient production capacity. Lt Gen Aujla explained that this would prevent monopolization by a single firm and promote a broader industrial base, benefiting both the military and private manufacturers.
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