By A Correspondent
New Delhi: In a major reform aimed at simplifying defence acquisition and accelerating self-reliance, India’s Defence Minister Rajnath Singh on Oct. 23, 2025, released the Defence Procurement Manual (DPM) 2025 at a function held in South Block.
The new manual, which will come into effect from Nov. 1, is expected to govern revenue procurements worth approximately INR 1 lakh crore (USD 11.4 billion) by the three Armed Forces and other establishments under the Ministry of Defence (MoD).
Hailing the DPM 2025 as a step towards greater efficiency and transparency, the Defence Minister said the revised framework would “simplify procedures, bring uniformity in functioning, and facilitate timely provisioning of goods and services critical for operational preparedness.”
He also underlined that the manual would provide greater opportunities for MSMEs and start-ups, encouraging indigenous defence manufacturing and technological innovation in line with the ‘Aatmanirbhar Bharat’ (Self-Reliant India) vision.
Key Highlights of DPM 2025
The Defence Procurement Manual 2025 brings sweeping procedural changes designed to expedite decision-making and promote ease of doing business.
Among the most significant reforms is the relaxation of Liquidated Damages (LD), penalties imposed for delivery delays. The new rule caps LD at 10% only in cases of inordinate delay, while for indigenisation efforts, the penalty has been reduced to 0.1% per week, compared to the existing 0.5%.
The manual also introduces a provision for assured orders up to five years and beyond for items developed under indigenisation by public and private players. This measure aims to incentivize local development and sustained innovation in the defence sector.
Another major reform is the removal of the requirement for a “No Objection Certificate” from the erstwhile Ordnance Factory Board, allowing faster procurement from other sources. Additionally, the DPM 2025 permits Limited Tender enquiries up to INR 50 lakh (USD 570,000), with flexibility to extend beyond that limit in exceptional cases.
To enhance operational readiness, the manual allows upfront provision of 15% growth of work in ship repair/refit and aviation equipment overhauling contracts, thereby reducing downtime of key military platforms. The procurement provisions based on Proprietary Article Certificates (PAC) have also been refined, with a validity of two years retained.
Structure and New Chapters
The DPM 2025 is divided into two volumes. Volume I outlines the main procurement procedures across 14 chapters, including three newly introduced ones: Promoting Self-Reliance through Innovation and Indigenisation, Information and Communication Technology Procurement, and Consultancy and Non-Consultancy Services.
The new chapter on self-reliance is particularly significant as it aims to promote indigenous design, development, and manufacturing of defence equipment and technologies, reinforcing India’s journey towards Aatmanirbharta (self-reliance) in defence. Volume II contains relevant forms, appendices, and government orders for user reference.
All Request for Proposals (RFPs) issued on or after Nov. 1 will be governed by DPM 2025, while those issued before will continue under DPM 2009. The manual has been prepared in close consultation with the armed forces and other stakeholders, ensuring practical applicability across the defence ecosystem.
The ceremony was attended by top defence leadership, including the Chief of Defence Staff, the Chiefs of the Army, Navy, and Air Force, and senior MoD officials, reflecting the institutional support behind the reform.
With its focus on efficiency, transparency, and indigenous innovation, DPM 2025 marks a transformative step in India’s defence procurement ecosystem, aligning with the broader goal of strengthening self-reliance and operational readiness of the armed forces.
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