India’s New Defence Procurement Manual 2025: What It Means and Why It Matters
New rules aim to boost self-reliance, support domestic industry, and speed up military readiness
Rajnath Singh, Gen Upendra Dwivedi.
14 September 2025 India’s Ministry of Defence has released a significantly updated version of the Defence Procurement Manual (DPM) 2025, bringing much-needed reforms to how the Armed Forces handle their operational and maintenance-related purchases. This revised manual, approved on 14 September by Defence Minister Rajnath Singh, replaces the previous edition that was in place since 2009.
The new policy aims to make procurement faster, fairer, and more industry-friendly, while also pushing for greater self-reliance in defence manufacturing, in line with the government’s Aatmanirbhar Bharat initiative.
With India’s military preparing for an increasingly complex and high-tech security environment, the DPM 2025 is designed to ensure that the Armed Forces can access what they need — when they need it — with less red tape and more accountability.
What is the Defence Procurement Manual?
The Defence Procurement Manual is the key document that governs how the Ministry of Defence buys goods and services under the “revenue” category. This includes items needed for the day-to-day functioning and operational preparedness of the Army, Navy, and Air Force — such as ammunition, fuel, clothing, repairs, spare parts, and logistics support.
Unlike capital procurement, which deals with big-ticket items like fighter jets or submarines, revenue procurement is about keeping the military running efficiently on a daily basis. The DPM is particularly important this year, with revenue procurement valued at roughly ₹1 lakh crore.
Faster and simpler procurement
One of the most important changes in the DPM 2025 is how it speeds up and simplifies the procurement process at the ground level. Key decision-makers — called Competent Financial Authorities (CFAs) — have been given more freedom to approve purchases, extend deadlines, and make other decisions without waiting for clearance from higher-ups.
This empowerment means fewer delays, less paperwork, and a more responsive supply chain for frontline military units. For instance, if a supplier needs more time to deliver equipment, the local CFA can now grant an extension directly, regardless of the length of the delay.
The manual also allows CFAs to adjust bid deadlines in case of low vendor participation, making the process more flexible and inclusive.
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Support for Indian industry and startups
The revised manual puts a strong focus on encouraging Indian businesses — particularly startups, MSMEs (Micro, Small & Medium Enterprises), and private sector players — to participate in defence procurement.
To ease their entry into the defence ecosystem, the DPM 2025:
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Removes the requirement to get No Objection Certificates from Defence Public Sector Undertakings (DPSUs), ensuring open and fair competition.
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Offers guaranteed orders for up to five years, with the option to extend up to ten years in special cases.
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Introduces “handholding” measures, where the Armed Forces will assist companies by sharing technical knowledge, existing equipment, and other support to help them develop new products.
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Relaxes penalties for development-stage delays. No penalties will be levied during the design and prototyping phase, and even after that, the penalty is kept minimal at 0.1%. The maximum penalty has been reduced to 5%, with a 10% cap only in rare cases of significant delay.
These provisions are expected to encourage risk-taking, innovation, and wider participation in defence manufacturing — all crucial for building a self-reliant military supply chain.
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Infographics: India’s Defence Procurement Manual 2025.
Boost to innovation and research
Recognising the growing importance of advanced technology in warfare, the manual includes a new chapter focused on innovation and indigenisation. The goal is to support:
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In-house development of defence equipment and spares.
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Partnerships between the military, private industry, academic institutions such as IITs and IISc, and other research organisations.
This is a significant step toward reducing reliance on foreign suppliers and building strategic technologies within the country. Young engineers, scientists, and entrepreneurs will now have more opportunities to contribute directly to India’s defence preparedness.
Reforms in maintenance and repair
Given the complexity of modern equipment — especially in the air and naval domains — the manual introduces key changes to reduce downtime and improve operational readiness:
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An upfront 15% growth provision has been allowed for repair, refit, and maintenance work, ensuring that delays in planning don’t hamper the availability of equipment.
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For items that are specialised or available from limited sources, the manual permits limited tendering for values up to ₹50 lakh. This helps procure urgent, critical parts without lengthy procedures.
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Proprietary items can be purchased directly, provided that parallel efforts are made to identify alternative suppliers to avoid dependency.
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Use of technology and transparency
The manual aligns closely with the Manual for Procurement of Goods issued by the Ministry of Finance and integrates digital tools and best practices to ensure that procurement is transparent, efficient, and fair.
It reinforces the government’s ongoing efforts to minimise corruption and inefficiency by using technology to streamline procurement, record-keeping, and auditing.
Simplified government-to-government deals
For high-value military equipment acquired through government-to-government (G2G) agreements — such as those with the US, France, or Israel — the new manual introduces clearer guidelines. These updated procedures will ensure faster, more reliable acquisition of strategic systems while maintaining accountability.
Why now?
The last major update to the Defence Procurement Manual was in 2009. Over the past 16 years, India’s military requirements, industrial base, and strategic outlook have all changed dramatically. With more complex threats, higher operational tempo, and a push for domestic manufacturing, the earlier version had become outdated.
This revision comes after extensive consultation with the Armed Forces, industry stakeholders, and government departments. It reflects both the urgent need for reform and the vision for a future-ready defence sector.
Who benefits from the new rules?
| Group | Key Benefits |
|---|---|
| Armed Forces | Faster procurement, less bureaucracy, more control |
| Startups & MSMEs | Easier entry, guaranteed orders, technical support |
| R&D Institutions | Greater opportunities for collaboration and funding |
| Private Industry | Level playing field, reduced reliance on DPSUs |
| Taxpayers | More transparent, efficient use of public funds |
The Defence Procurement Manual 2025 is more than just an administrative update. It is a strategic shift — one that aims to make the Indian Armed Forces more agile, self-sufficient, and better connected with domestic talent and enterprise.
By empowering field formations, opening doors to private innovation, and promoting indigenisation, the manual sets the stage for a more resilient and responsive defence ecosystem.
As modern warfare becomes increasingly fast-paced and technology-driven, India’s military logistics must keep up. The DPM 2025 is a strong step in that direction — simplifying the path between need and supply, and ensuring that India’s Armed Forces remain equipped, efficient, and future-ready.
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