New rules, faster deals: DPM 2025 brings India's defence procurement process into fast lane
Defence Minister Rajnath Singh, on Thursday, released the Defence Procurement Manual (DPM) 2025.
The new procurement manual, effective from November 1, will facilitate the revenue procurement amounting to approximately Rs 1 lakh crore by the three Services and other establishments under the defence ministry.
The defence ministry has introduced several key changes in the new manual to speed up the process of decision-making and promote ease of doing business.
One of the major reforms is the relaxation of liquidated damages (LD) — the penalty charged for delayed delivery. The maximum LD will now be capped at 10 per cent only in cases of inordinate delay.
This provision has further been relaxed in case of indigenisation, where only 0.1 per cent LD per week will be levied instead of 0.5 per cent per week as applicable in other cases.
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The revised manual also allows provisions for assured order, ranging up to five years and beyond, for the items developed by the public/private players under indigenisation. Limited tender enquiry can now be used for procurements up to Rs 50 lakh, and beyond that in exceptional cases.
A major procedural change is the removal of the requirement to obtain a ‘No Objection Certificate’ from the former Ordnance Factory Board before buying from other sources.
The manual also permits upfront provision for a 15 per cent growth in work during ship refits or aviation equipment overhauls, reducing downtime and improving operational readiness.
The rules for proprietary procurement (PAC basis) have been updated while keeping their validity at two years.
All new Requests for Proposals (RFPs) issued after November 1, 2025, will follow DPM 2025. Cases where RFPs are issued before October 31, 2025, will continue under DPM 2009, amended upto date.
"In cases, where RFP has been issued in the past but that has been retracted/to be retracted and has to be reissued on or after November 01, 2025, will be governed by the provisions of DPM 2025," the defence ministry stated.
DPM 2025 has been divided into two volumes — Volume I covers the main procedures, while Volume II includes all related forms and government orders. There are fourteen chapters in Volume-I, which include three new chapters: Promoting Self-reliance through Innovation and Indigenisation, Information and Communication Technology Procurement and Consultancy and Non-Consultancy Services.
The new chapter on promoting self-reliance will foster indigenous design and development of defence items to achieve the goal of Aatmanirbharta in defence manufacturing and technology.
Singh expressed confidence that the new manual will simplify the procedures, bring uniformity in functioning and help in providing goods and services required by the armed forces for operational preparedness.
Defence