New Delhi Apr 25 PTI The armed forces will have to source military hardware under modernisation drive from the domestic industry and their import should only be an exception the defence ministry said on Monday announcing major changes in Indias defence acquisition procedureThe ministry also decided to dispense with the requirement of the Integrity Pact Bank Guarantee IPBG to reduce the financial burden on the Indian defence industry a move aimed at promoting domestic manufacturingIt said Earnest Money Deposit EMD will be taken as bid security for all acquisition cases costing more than Rs 100 croreGoing forward all modernisation requirements of the defence services and Indian Coast Guard are to be indigenously sourced irrespective of the nature of the procurement the ministry said in a statementIt said import of defence equipment and sourcing them from the foreign industry under capital acquisitions should only be an exception and undertaken with specific approval of the defence acquisition council or the defence ministerAs advised by the Ministry of Finance and to reduce the financial burden on the Indian defence industry whilst maintaining financial safeguards the requirement of Integrity Pact Bank Guarantee IPBG has been dispensed with the ministry saidInstead Earnest Money Deposit EMD will be taken as a bid security for all acquisition cases with Acceptance of Necessity AoN cost more than Rs 100 crore it addedThe ministry said the EMD will be valid for the selected vendor up to the signing of contracts and returned to remaining vendors post declaration of selectionPost contract integrity pact will be covered through the performance cum warranty bank guarantee PWBG Further as per extant government of India policy EMD is not required from Micro and Small Enterprises MSEs it saidTo encourage wider participation and a broad base of indigenous defence manufacturing sector in the country the total order quantities in acquisition cases are to be split between shortlisted vendors wherever viable according to the ministryFurther the other technically qualified bidders who have not been awarded contract will be issued a certificate by the services indicating that the product has been successfully trial evaluated to facilitate vendors to explore other markets it saidThe defence ministry also decided to cut waiting time for projects under the iDEX frameworkThe iDEX programme was launched in 2018 as an ecosystem to foster innovation and technology development in the defence and aerospace sectors by engaging innovators and entrepreneursTo enable the budding startup talent pool of the country to contribute towards the twin mantras of self-sufficiency and indigenisation the procurement process under the iDEX procedure of DAP Defence Acquisition Procedure 2020 has been simplifiedWith this simplification time taken from grant of AoN to signing of the contract will be reduced to 22 weeks the ministry saidIt said the Make-II procedure of DAP-2020 involving indigenisation of defence equipment through industry-funded projects at the prototype development stage has been simplified by incorporating single-stage composite trials of prototypes and dispensing off with quantity vetting and scaling for initial procurementsPost simplification the timelines in the Make-II procedure will be reduced to 101-109 weeks from an existing total time period of 122-180 weeks the ministry saidIn the last few years the government has taken a series of measures to promote domestic defence productionIndia facing tough challenges from neighbours on its northern and western frontiers is one of the largest importers of arms globally According to estimates the Indian armed forces are projected to spend around USD 130 billion in capital procurement over the next five yearsThe government now wants to reduce dependence on imported military platforms and has decided to support domestic defence manufacturingThe defence ministry has set a goal of a turnover of USD 25 billion Rs 175 lakh crore in defence manufacturing in the next five years which includes an export target of USD 5 billion Rs 35000 crore worth of military hardware PTI MPB ANB ANB