Govt to expand competitive bidding for defence buys

In a move that could level the playing field for private defence firms, the Ministry of Defence (MOD) will expand the use of competitive bidding in procuring weapons and systems for the armed forces.

- BHASWAR KUMAR

This would be particularly for the equipment where Indian private industry has established capacity, Defence Secretary Rajesh Kumar Singh told Business Standard.

This is part of the government's ongoing shift from nomination, or the practice of directly awarding procurement contracts to public-sector entities without a tendering process. Industry insiders estimate that a substantial share of the production of defence public sector undertakings (DPSUs) is secured through nomination. Private defence firms have long viewed a shift away from this practice as key to ensuring a more level playing field.

Emphasising that defence procurement must continue to be a diligent process, given the use of public funds, the defence secretary said promoting ease of doing business in the defence industry would be a priority for the MoD this year, aligning with its decision to observe 2025 as the 'Year of Reforms'.

"The MoD is focusing on a more expeditious industrial licensing process in defence and taking additional steps to enhance ease of doing business. This is an ongoing effort involving multiple branches of the ministry, particularly the Department of Defence Production, along with the Department for Promotion of Industry and Internal Trade and the Petroleum and Explosives Safety Organisation," Defence Secretary Rajesh Kumar Singh (pictured) said.