Overview
The Ministry of Defence released the Defence Procurement Manual (DPM) 2025 on October 23, 2025, in New Delhi. This manual, effective from November 01, 2025, aims to streamline defence procurement procedures and promote self-reliance in the defence sector. The DPM 2025 is expected to facilitate revenue procurement amounting to approximately Rs 1 lakh crore by the three Services and other establishments under the Ministry of Defence (MoD).
Key Developments
Simplification and Uniformity
The new manual is designed to simplify procedures and bring uniformity in functioning, ensuring the Armed Forces receive the necessary goods and services for operational preparedness. It also aims to provide more opportunities to MSMEs and start-ups in defence manufacturing and technology, while maintaining fairness, transparency, and accountability.
Liquidated Damages (LD) Relaxation
- Maximum LD: Capped at 10% for inordinate delays in delivery of stores and services.
- Indigenisation: Reduced LD of 0.1% per week, compared to 0.5% per week in other cases, to encourage indigenous development.
Assured Orders and Tender Enquiries
- Assured Orders: Provisions for assured orders ranging up to five years and beyond for items developed by public/private players under indigenisation.
- Limited Tender Enquiry: Can be used for values up to Rs 50 lakh, and beyond that in exceptional cases.
Other Key Changes
- No Objection Certificate: Requirement from the erstwhile Ordnance Factory Board has been dispensed with.
- Growth of Work: Upfront provision for 15% Growth of work in Repair/Refits of ships & Repair/Overhauling of Aviation equipment to reduce downtime.
- Proprietary Article Certificate (PAC): Provisions redefined, maintaining initial validity for 2 years.
Implementation
All Request For Proposals (RFPs) issued after November 01, 2025, will be governed by DPM 2025. RFPs issued before this date will continue to be governed by DPM 2009. Retracted RFPs reissued on or after November 01, 2025, will also fall under DPM 2025.
Structure of DPM 2025
The manual is divided into two volumes:
- Volume-I: Contains the main provisions of the procurement procedures, comprising fourteen chapters.
- Volume-II: Includes forms, appendices, and government orders referenced in Volume-I.
New Chapters in Volume-I
- Promoting Self-reliance through Innovation and Indigenisation: Fosters indigenous design and development to achieve Aatmanirbharta in Defence.
- Information and Communication Technology Procurement.
- Consultancy and Non-Consultancy Services.
UPSC Relevance
This news is relevant for the UPSC Civil Services Exam, particularly for GS Paper 3 (Economy and Security) and GS Paper 2 (Government Policies & Interventions). It highlights government efforts to boost indigenous defence manufacturing and streamline procurement processes.
Key Areas for UPSC Preparation
- Indigenisation of Defence: Understand the government's policy framework and initiatives.
- Defence Procurement Procedures: Analyze the changes introduced by DPM 2025 and their impact.
- MSMEs in Defence: Evaluate the role of MSMEs in the defence sector and the opportunities available to them.
- Aatmanirbharta in Defence: Discuss the strategic importance of self-reliance in defence manufacturing.
Important Facts
- DPM 2025 aims to facilitate procurement worth approximately Rs 1 lakh crore.
- The manual includes provisions for reduced Liquidated Damages (LD) for indigenised products (0.1% per week).
- It enables upfront provision for 15% Growth of work in Repair/Refits of ships & Repair/Overhauling of Aviation equipment.
- The manual promotes indigenous design and development to achieve Aatmanirbharta in Defence.