For over three decades, I sat on the “other side” of the table. I’ve evaluated countless proposals, sat through endless technical presentations, and unfortunately, watched brilliant engineering ideas from Indian MSMEs die a slow death.
Why? Not because the technology was bad. But because the procurement process was designed for buying, not building. It was rigid, risk-averse, and frankly, intimidating.
But something has changed. And if you are an aerospace manufacturer, a defence startup, or a deep-tech MSME, you need to sit up and pay attention.
The Ministry of Defence has released the Defence Procurement Manual (DPM) 2025. While most people are skimming through the standard clauses, there is a hidden gem that changes the entire landscape of Revenue Procurement: Chapter 10.
For the first time, the Indian Armed Forces aren’t just looking for vendors; they are looking for partners. Here is why DPM 2025 is a goldmine for your business—and how you can claim your share.
1. The ‘Suo Moto’ Revolution: Don’t Wait to be Asked
In the past, you had to wait for a Request for Proposal (RFP) or a tender. You were reactive. If we didn’t ask for it, you couldn’t sell it.
Clause 10.9 shatters that barrier. It introduces the ‘Suo Moto’ proposal.
This means you don’t have to wait for the Armed Forces to release a tender. If you have identified a part, a sub-system, or a technology that is currently being imported, you can proactively approach the Directorate of Indigenisation with a proposal to make it in India. You pitch the solution, and if it meets the requirement, the process starts. You are now the driver, not just a passenger.
2. Cash Flow is King (And We Finally Get It)
I know the biggest killer for MSMEs is working capital. You can’t eat “potential orders.” You need cash to buy raw materials and run R&D.
DPM 2025 addresses this head-on. Under Clause 10.15.3, the government can now release up to 30% Advance Payment against a bank guarantee for development projects.
Even better? There is No Earnest Money Deposit (EMD) required for these development contracts. The system is finally acknowledging that your money should go into engineering, not locked up in bank guarantees before you’ve even started.
3. Removal of Risk: Punishment is Out, Partnership is In
Development is messy. Prototypes fail. Timelines stretch. In the old days, if you were late, you were hit with Liquidated Damages (LD)—penalties that could wipe out your profit margin. It made R&D too risky for smaller players.
Chapter 10 changes the rules. Clause 10.18.1 explicitly allows for the waiver of Liquidated Damages during the development phase. The MoD understands that R&D has inherent uncertainties. We are no longer here to punish you for the “trial” in “trial and error.”
4. Guaranteed ROI: The 5-Year Promise
The nightmare scenario for any vendor is this: You spend two years developing a product, you prove it works, and then… the government issues a new open tender, and someone else undercuts you by ₹10.
That fear ends now. Clause 10.18.1 provides for an Initial Order Quantity (IOQ) to be placed immediately upon successful development. More importantly, it allows for Long Term Procurement from the successful developer for up to 5 years without re-tendering.
This is your Return on Investment. If you build it and it works, you are the supplier. Period.
The Bottom Line
The government has laid out the red carpet. The policy (DPM 2025) is revolutionary, the intent (Atmanirbhar Bharat) is clear, and the funding is available.
However, let me offer a word of caution. While the policy is new, the process—the Statement of Case, the commercial bid structure, the Intellectual Property Rights (IPR) negotiations—remains complex. A brilliant product can still be rejected if the proposal doesn’t speak the language of the Armed Forces HQ or fails to map the Operational Requirement (OR) correctly.
This is where the gap lies
You have the engineering capability. We the veterans have the operational insight.
Navigating this manual requires someone who understands both the cockpit and the conference room. A seasoned veteran who has managed these requirements from the inside, can help you translate your technical prowess into a winning, compliant Defence proposal.
Chapter 10 is the opportunity you’ve been waiting for. Don’t let it get lost in the paperwork. Let’s build something together.
