The inconsistencies in our Exchange Rate Variation, as spelt out in DPP 2013 had been a major bone of contention for private sector enterprises in the Indian Defence Industry. They had been placed at a disadvantage as compared to the Defence Public Sector Units, when bidding and in execution of contracts with import content. The amendments, as instructed by the government directive, give the private players a level playing field.
The major changes also include the extension of the applicability of Exchange Rate Variation benefits in the case of Rupee contracts not only for Buy (Global) but all categories of defence contracts under the capital acquisitions mentioned at Para 4 of DPP 2013.
Certain stipulations restricting the applicability of exchange rate variation in cases where delivery period is less than one year, and variation being within a bandwidth of +/- 2.5 % have also been enumerated in the amendments.