Decoding Defence Procurement Manual 2025 - A Report

The Defence Procurement Manual (DPM) 2025 is a revision of DPM 2009, which instates the rule for revenue procurement (spares, repairs, MRO, ICT, services). The DPM 2025 came into force on 1st November 2025. This roughly governs Rs. One Lakh Crore of annual revenue procurement by the three Services and MoD Organisations.

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DPM 2025 is divided into two volumes:

Volume I- This highlights the principles, procurement methods, delegated authorities, contract rules and new inclusion of Indigenisation and Innovation, ICT procurement, and Consultancy/Services. Volume II- It emphasises the operational tools that are required- standard forms, templates, certificates, and appendices making the implementation of Volume 1 stronger.

Integrating Volume I and Volume II is designed to speed up decisions by federalising the powers, reducing punitive risk on developers, providing demand certainty via confirmed multi-year deals of indigenous items and open revenue procurement to private industry, MSMEs and startups by simultaneously managing transparency and audit requirements.

In terms of defence procurement, the primary model followed by India until now has been capital acquisition. This meant the focus was solely on the purchase of physical defence assets such as fighter jets, submarines, UAVs, artillery systems, etc.

WHY DEFENCE PROCUREMENT REFORM MATTERS FOR THE INDUSTRY?

In terms of defence procurement, the primary model followed by India until now has been capital acquisition. This meant the focus was solely on the purchase of physical defence assets such as fighter jets, submarines, UAVs, artillery systems, etc. Thus, we always saw our defence capability in terms of the number of jets or tanks the country had. However, one crucial aspect that used to go unaddressed was revenue procurement.

Revenue procurement goes beyond mere acquisition; it focuses on the operational readiness of these assets. Thus, it includes the continuous acquisition of spares, repairs, maintenance costs, updating software, and providing logistical support, all complementary activities that directly impact the defence capability and readiness of a country.

Therefore, the DPM 2025 brings a change in this mentality. It updates the rules of revenue procurement, which were last established in 2009. It addresses several shortcomings of DPM 2009 while also increasing its budget to an estimated amount of Rs. 1 lakh crore for the financial year 2025-26. The DPM 2025 also aims at opening up this domain to private entities and investments, which will act as a game-changer for the Indian defence industry. It will act as a crucial component of industrial policy rather than an administrative process like its predecessor.

Moreover, the DPM 2025 also attempts to incorporate India's self-reliance agenda and capitalise on the defence startups that have started coming up in India.

Over the last decade, policy initiatives such as Atmanirbhar Bharat, the development of defence industrial corridors, and innovation schemes like iDEX have led to a structural shift in the Indian defence industrial ecosystem. It has created a conducive environment for an explosion in the number and diversity of firms competing for these defence contracts. 

The DPM 2025 thus must be seen as a response to the mismatch that had appeared between the now much-advanced industrial capability and the outdated, risk-averse, and often rigid procurement rules. The government can expect this reform to improve the predictability of demand, reduce the transaction costs, and better integrate the Indian industry into the defence ecosystem. For industries, this reform signals the start of a new era as it brings new opportunities to their doorstep.

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For all official and academic purposes, use the following as a citation, which follows the Chicago Manual Style.

Aryaman Singh and Tanuka Das

“Decoding DPM 2025”

THE GEOSTRATA, January 08, 2026.

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BY ARYAMAN SINGH AND TANUKA DAS

CENTRE FOR INDUSTRY AND INNOVATION

TEAM GEOSTRATA

info@thegeostrata.com