Defence Ministry unveils new framework to streamline revenue procurement

India on Sunday (September 14, 2025) unveiled a new framework to streamline, simplify and rationalise the revenue procurement process for the armed forces, with an overall focus on making available required resources without any delays.

The Defence Procurement Manual (DPM) 2025 lays down the guiding principles and provisions for all revenue procurements in the Defence Ministry valued around ₹1 lakh crore for the current fiscal, an official readout said.

“It will foster jointness among the three Services and help in maintaining the highest level of military preparedness through expeditious decision making,” it said.

The DPM will “ensure timely availability of requisite resources to the armed forces and at appropriate cost”, the Ministry said in the readout. The new framework was released after it was approved by Defence Minister Rajnath Singh.

“Defence Minister Rajnath Singh has approved the DPM 2025 to further streamline, simplify, enable and rationalise the revenue procurement process in the Ministry of Defence and cater to the emerging requirements of the armed forces in the era of modern warfare,” the Ministry said.

It said the new manual is aimed at achieving self-reliance in fulfilling the needs of the armed forces under the revenue head (operations and sustenance segment). Procurement of goods and services by the defence services and of other organisations under the Ministry is regulated by the DPM. It was last promulgated in 2009.

The new manual was under revision in the Ministry in consultation with the armed forces and other stakeholders.

“Ease of doing business has been further strengthened in the document, which aims to boost Aatmanirbharta (self-reliance) in defence manufacturing and technology,” the Ministry said.

“There has been a pressing need for this manual to be aligned with the latest developments in the field of public procurement, duly ensuring the use of technology in procurement with utmost fairness, transparency, and accountability,” it said.

The revised document has been aligned with the updated provisions of the manual for procurement of goods issued by the Finance Ministry.

“As a major thrust to Aatmanirbhar Bharat, a new chapter has been included to promote self-reliance through innovation and indigenisation,” the Ministry said.

“This will help in the indigenisation of defence items/spares through in-house designing and development in collaboration with public/private industries and academia,” it noted.

The concerns of the individuals and industry who want to venture into this sector have been addressed by relaxing many provisions of development contracts.

“Provision has been introduced not to levy Liquidity Damages (LD) during the development phase,” the Ministry said.

Minimum LD of 0.1% will be levied post development of any prototype while the maximum LD has been lowered to 5%, and in case of inordinate delays only, maximum LD will be 10%, it said. This will result in incentivising those suppliers who genuinely try to meet the deadline but make the supplies with little delay, it added.

In addition, a provision has been made to provide assured guarantee of orders in terms of quantity.

The revised document will empower the competent financial authorities at field level/lower formations, expedite decision making, avoid movement of files between lower to higher levels and ensure timely payment to the suppliers, the Ministry said.