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New Delhi: Today, defence spending is more about technology than just numbers. Militaries around the globe are developing a range of air defence, electronic warfare, autonomous systems and intelligence platforms to deal with changing security threats. In a similar vein, India has recently made decisions on procurement of modernisation of its armed forces and development of the indigenous defence manufacturing capability, with other procurements following suit.
On a positive note, Defence Minister Rajnath Singh-led Defence Acquisition Council (DAC) has approved Acceptance of Necessity (AoN) for defence acquisition proposals worth ₹52,000 crore in a big move. An AoN is not a PO, it is simply an agreement that the government has given “in-principle” approval to the procurement process to proceed through tendering, technical evaluation and contract negotiations.
The clearances are timely as India has allocated a record ₹6.81 lakh crore for defence in the Union Budget 2025-26. Of this, almost ₹1.92 lakh crore has been allocated for capital expenditure, indicating the government’s ongoing efforts to procure new military systems and equipment. The indigenisation programme has set aside 75% of the capital procurement budget for buying domestically, providing a huge opportunity for Indian defence manufacturers.
The new authorizations cover all three services and are most focused on the rising aerial threat and a way to increase battlefield situational awareness.
The Indian Army has got clearance from the DAC for procurement of Anti-Unmanned Aerial Vehicle (UAV) Electronic Warfare System designed to detect, track and neutralise hostile drones. The Army will also be acquiring the indigenous Man Portable Anti-Tank Guided Missile (MPATGM) system, the Medium Range Surface-to-Air Missile (MRSAM) system, Very Short Range Air Defence System (V-SHORADS), Active Protection Systems for armoured vehicles and jet-powered loitering munitions.
This is a response to the evolving demands of the battlefield in which drones, precision-guided munitions and electronic warfare are as vital as traditional firepower. The recent conflicts in the region have shown that the operational challenges of unmanned systems are considerable, and that layered air defence is a strategic priority, both in terms of cost and capability.
The Indian Navy will enhance its maritime capabilities with the addition of Multi Influence Ground Mines, Naval Shipborne Unmanned Aerial Systems and a Land Based Testing Facility for Electric Propulsion technologies. The projects are to be expected to boost maritime surveillance, sea-denial and advance next generation naval platforms.
In the meantime, the Indian Air Force has got approval to buy Fixed-Wing High Altitude Pseudo Satellites (FW-HAPS). These high-endurance aerial platforms can stay in the air for long periods of time and can support intelligence, surveillance and reconnaissance tasks as well as telecommunications and remote sensing.
The most significant aspect is that numerous systems approved are either indigenous or are likely to be produced in India. This is in line with the Government’s Atmanirbhar Bharat initiative to lessen reliance on foreign defence equipment and develop a globally competitive defence sector in the country.
The statistics back this up. In FY2023-24, India’s defence production is estimated to be at a record high of ₹1.46 lakh crore, with defence exports at an all-time high of ₹23,622 crore in FY2024-25, from ₹686 crore in FY2013-14. The government has also been increasingly pushing towards the use of its Positive Indigenisation Lists and promoting local procurement in thousands of defence items.
These procurement approvals have significant economic consequences, in addition to military readiness. The big defence orders usually create a large supply chain that includes the public sector players, private manufacturing, MSMEs and technology players in electronics, missile systems, sensors, and advanced engineering.
The approval amount of ₹52,000 crore is thus more than just a regular purchase. They are indicative of India’s ongoing push for modernization of the military and its strategy of investing in defence to build up a manufacturing ecosystem that increasingly is part of the country’s long-term industrialization trajectory, while simultaneously promoting technological self-reliance.
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