Chhatrapati Sambhajinagar: In a significant move aimed at bolstering India's defense capabilities and fostering innovation, the Defense Acquisition Council (DAC) has greenlit amendments to the Defense Acquisition Procedure (DAP) 2020.
Under the leadership of defense minister Rajnath Singh, the DAC approved Acceptance of Necessity (AoNs) worth Rs 84,560 crore, emphasizing procurement from domestic vendors, particularly start-ups and Micro, Small, and Medium Enterprises (MSMEs).
Key amendments include provisions to support design and development costs for start-ups, offering options like insurance surety bonds and intellectual property rights mortgages for advance payments, and relaxing performance security and Annual Maintenance Contract (AMC) security requirements. Additionally, revised liquidated damages (LD) and penalty extension policies aim to streamline procurement cycles and encourage iterative development of innovative products. These reforms not only promote an 'ease of doing business environment' but also aim to attract private investments, ensuring a thriving ecosystem for defense innovation and procurement.
Will attract private investments for startups
“These reforms will create an ease of doing business environment and attract private investments for startups," said Ashish Garde, director of Magic, highlighting the positive impact on the startup ecosystem.