INDIA Law and Practice Contributed by: Alina Arora, Samarth Gupta and Parth Singh, Shardul Amarchand Mangaldas & Co
(USD210 million) or more, at a standard value of 30% of estimated acquisition cost. Indian vendors participating in a Buy (Global) procure - ment meeting 30% IC need not comply with offsets. Offsets do not apply to single-vendor cases, IGA/FMS, fast-track cases, or option-clause purchases where the original contract did not require offsets. Offsets are discharged through purchase of eligible products, investment, and transfer of technology, with monitor - ing by the MoD’s Defence Offset Management Wing, which audits annual progress and penalises shortfalls. For foreign OEMs, multipliers of two to four apply to technology transfer to Indian enterprises and govern - ment institutions and to the acquisition of critical tech - nology by the DRDO. Offset credits may be banked. IC Each procurement category under the DAP 2020 carries a minimum IC requirement. The highest pref - erence category, Buy (Indian-IDDM) (indigenously designed, developed and manufactured), requires at least 50% IC, and Buy (Indian) requires 50% (rising to 60%, where the item is indigenously designed). Sovereign Capability Positive indigenisation lists issued since 2020 bar import of notified items after prescribed dates. The GoI’s Atmanirbhar Bharat (self-reliant India) initiative drives domestic sourcing. 2.8 Security of Supply and Resilience Requirements Security of supply is secured primarily through con - tract. The DAP 2020 requires product support (pro - cured along with the equipment) for at least three to five years beyond warranty. It also requires a life cycle support contract (signed with the main contract) that binds the seller to long-term supply of spares and repairs, active obsolescence management, and at least two years’ notice to the buyer before a produc - tion line closes. India’s defence sector FDI conditions also require investee/joint venture companies to have product design, development, maintenance and life cycle sup - port capability in India.
Another safeguard under the DAP 2020 is that any change in vendor name for any reason (including merger, acquisition or amalgamation) during the pro - curement process requires MoD consent. 2.9 Evaluation Criteria and Award of Defence Contracts Evaluation is sequential, not weighted. Technical eval - uation tests compliance with qualitative requirements, field trials test performance, and only compliant bids qualify for commercial evaluation (with award ordinar - ily going to the lowest evaluated price). Thus, factors other than price operate upstream – in the category chosen at AoN, in the eligibility requirements, in the IC requirements, and in security requirements. Two qualifications exist: • enhanced performance parameters can earn a credit of up to 10% where the tender provides for it; and • life cycle cost is evaluated where specified in the RFP. 2.10 Exclusion Grounds Under the DAP 2020 and the DPM 2025, bidders may be excluded for: • failing eligibility or technical requirements; • absent licences; • false declarations; • breach of the pre-contract integrity pact; • prior suspension or debarment; or • national security concerns. Bidders must disclose bans affecting them and their subcontractors and technology partners. The DAP 2020 specifically requires bidders to certify they are not currently banned, debarred or suspended by the GoI or any other government organisation and to disclose relevant past debarments. Cross-debar - ment across GoI ministries is not the default position and requires a Department of Expenditure (DoE) order. National security is an express ground for disqualifica - tion. GFRs permit restrictions, including prior registra -
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