The Indian defence sector is set to feel a major benefit from a Rs2.23trn ($26.8bn) investment into defence acquisitions across land, air and sea domains, as the Defence Acquisition Council of India announced on 30 November its approval of the Area of Necessity (AoN) for capital acquisition proposals to that amount, with 98% of the spending to be sourced domestically.

As well as announcing the procurement of new platforms and an increase and upgrade to existing assets, the DAC also approved major amendments to the Defence Acquisition Procedure that will now require all categories of procurement to contain at least 50% indigenous content. 

In an effort to streamline participation by start-ups and MSMEs in the defence ecosystem, it was also decided that for all procurement cases with an AoN cost of up to $36m, registered MSMEs and recognised start-ups will be considered for the issue of a Request for Proposal (RFP) without any financial parameters stipulation, which can be further relaxed with approval of the Defence Procurement Board (DPB) for AoN costs up to $60m on a case-by-case basis. 

India has an ambitious indigenisation programme – ‘Make in India’ that began in 2015 – across all sectors of its economy, with a particular record of implementation within the defence sector. The Government of India aimed to achieve a turnover of $25bn within the Indian Defence export sector by 2025 including export of $5bn in Aerospace and Defence goods and services.

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By GlobalData

India acquisition plans

The DAC has granted the AoN for the acquisition of two kinds of anti-tank munition, namely Area Denial Munition (ADM) kinds 2 and 3, capable of neutralising tanks, armoured personnel carriers, and enemy personnel. 

To replace the Indian Field Gun (IFG), which has reached the end of its service life, an AoN for the purchase of a cutting-edge Towed Gun System (TGS) has been awarded, which will become the backbone of the Indian Army’s artillery units. 

The AoN for acquisition and integration of Automatic Target Tracker (ATT) and Digital Basaltic Computer (DBC) for T-90 Tanks has also been granted, which would aid in preserving T-90 tanks’ combative advantage over opposing platforms. 

The AoN was also granted for a 155 mm Nubless projectile for use in 155 mm artillery weapons, which will improve the projectiles’ lethality and safety. 

The AoN for the acquisition of Medium Range Anti-Ship Missiles (MRAShM) for Indian Navy surface platforms has also been granted. The MRAShM is envisioned as a lightweight Surface-to-Surface Missile that will serve as the principal offensive armament for Indian Naval Ships.

The DAC granted AoNs to Hindustan Aeronautics Limited (HAL) for the acquisition of Light Combat Helicopters (LCH) for the Indian Air Force (IAF) and Indian Army, as well as Light Combat Aircraft (LCA) Mk 1A for the IAF.

The DAC has also granted AoNs for the indigenous upgrade of Su-30 MKI aircraft from HAL. 

All of the Indian Army, Navy and Airforce equipment will be purchased under the Buy (Indian-IDDM) category.