India's defence procurement is going domestic, but foreign-designed weapons still limit technological self-reliance.
On October 26, 2026, India's Defence Acquisition Council (DAC; रक्षा अधिग्रहण परिषद), chaired by Defense Minister Rajnath Singh, accorded Acceptance of Necessity (AoN) to capital acquisition proposals worth about ₹2,12,000 crore, or ₹2.12 lakh crore (about US$22.3 billion), and said that approximately 82 percent of the procurements would be made from Indian industry, according to the Ministry of Defence (MoD; रक्षा मंत्रालय) release issued through the Press Information Bureau (PIB; पत्र सूचना कार्यालय). A crore is 10 million rupees and a lakh crore is one trillion rupees. The remaining 18 percent of the approved value represents approximately ₹38,160 crore (about US$4.0 billion), comparable in monetary scale to the ₹38,424 crore (US$4.03 billion) India earned from defence exports in the fiscal year ended March 31, 2026. The Ministry of Defence reported the export figure on April 2, describing it as a record and a 62.66 percent increase over the previous year. This comparison is illustrative rather than like-for-like: the first figure represents the estimated foreign component of an approval for future procurement, while the second represents exports recorded over a completed fiscal year. All U.S. dollar figures in this analysis use the reference rate of ₹95.2492 per dollar for October 30, 2026, set by Financial Benchmarks India and published by the Reserve Bank of India (RBI; à¤ारतीय रिज़र्व बैंक).
Set side by side, those two numbers frame the question behind the government's Atmanirbhar Bharat Abhiyan (आत्मनिर्à¤à¤° à¤ारत अà¤ियान), or self-reliant India, campaign in defense. Official spending data and international transfer records point to a clear answer. India has shifted a growing share of its defence procurement expenditure and contract awards toward domestic industry, but that shift does not yet demonstrate technological self-reliance in its most expensive weapons systems. The distinction matters: domestic contracts and production can expand even when major platforms depend on foreign designs, licensed technology or imported critical components. India’s arms-import profile suggests that procurement localisation is advancing faster than autonomy in the design of top-tier military platforms.
The starting point for that judgment is the approval pipeline itself, because AoN figures are the numbers that make headlines. Under the Defence Acquisition Procedure 2020, an AoN is an in-principle administrative approval that allows a proposal to move to requests for proposals, trials, commercial negotiation and, eventually, a contract. The October 26 release listed the categories approved without quantities or a split by service. For the Army they included high-mobility vehicles, a self-propelled tracked gun system, light multi-role helicopters, very short-range air defense systems, counter-drone systems and several classes of drones. For the Navy they included an active offboard decoy system and "indigenously designed and constructed major Naval platforms," and for the Air Force helicopters, air defense systems, weapons and a mobile weather radar. Three DAC meetings so far in fiscal year 2026-27 (April to March) have now cleared proposals worth about ₹3.74 lakh crore (US$39.3 billion).
That fiscal-year total is easier to read when the three meetings are compared directly. The table below lists each one and the domestic share the ministry gave for it.
| DAC meeting | AoN value (₹ crore) | US$ billion | Share from Indian industry, as stated |
|---|---|---|---|
| July 3, 2026 | About 52,000 | 5.5 | Not stated |
| September 7, 2026 | About 1,10,000 | 11.5 | About 98% |
| October 26, 2026 | About 2,12,000 | 22.3 | About 82% |
| Total, fiscal 2026–27 to date | About 3,74,000 | 39.3 | N/A |
Table 1: Defence Acquisition Council approvals in fiscal year 2026-27. Source: Ministry of Defence releases via PIB. Conversions at ₹95.2492 per US$ (October 30, 2026).
The size of those approvals matters only to the extent that they turn into contracts, and the ministry's own year-end figures show how far apart the two have drifted. In fiscal 2025-26 the ministry accorded AoN to 109 proposals worth ₹6.81 lakh crore (US$71.5 billion), against 56 proposals worth ₹1.76 lakh crore (US$18.5 billion) a year earlier, and signed capital procurement contracts for 503 proposals worth ₹2.28 lakh crore (US$23.9 billion), according to a ministry statement of April 1, 2026. The same statement said the ministry had fully used its revised capital outlay of ₹1.86 lakh crore for the year. A separate DAC release from March 27 put the council's own fiscal 2025-26 approvals at ₹6.73 lakh crore across 55 proposals, the difference reflecting approvals by authorities below the council, and described the contract total as the highest ever.
Comparing approvals with contracts across these years requires one caution, which the chart below makes visible. Contracts signed in any year mostly flow from approvals granted in earlier years, so a single-year ratio understates conversion when approvals are rising fast. In fiscal 2024-25, the ministry signed 193 contracts worth ₹2,09,050 crore (US$21.9 billion), more than the value of AoNs it granted that year.
Define the approval overhang, O, across fiscal years 2024–25 and 2025–26 as cumulative AoN value minus cumulative contract value:
Here At denotes the ministry's annual AoN value and Ct its annual contract value, with all amounts expressed in lakh crore rupees. The result represents the cumulative difference between approvals and contracts across the two fiscal years; it should not be interpreted as a verified stock of unfulfilled approvals at the end of fiscal 2025–26. Adding the ₹3.74 lakh crore in approvals reported for fiscal 2026–27 brings the indicative cumulative difference to approximately ₹7.94 lakh crore (US$83.4 billion). This expanded figure is a measure of the scale of approvals relative to contracts, not a confirmed outstanding procurement liability. At the fiscal 2025-26 signing pace of ₹2.28 lakh crore a year, clearing that amount would take about
The estimate overstates the true queue because some contracts in these years came from older approvals and some AoNs lapse or are merged, and it understates it because approvals granted before fiscal 2024-25 are excluded. Its point is narrower. The estimate does not establish how long individual proposals will take to reach contract signature. It does, however, highlight the scale of the difference between cumulative approval values and annual contract values. The domestic percentages announced at DAC meetings therefore remain commitments at the approval stage until subsequent contract data show how much procurement value has been formally awarded to Indian industry.
The measure that tracks actual money is capital acquisition spending, and here the domestic shift is unmistakable. The Lok Sabha's Standing Committee on Defence published the ministry's split between domestic and foreign capital procurement in its Third Report of December 2024. Domestic spending rose from ₹39,879 crore in fiscal 2014-15 to ₹93,377 crore (US$9.8 billion) in 2023-24, an increase of 134 percent, while foreign spending moved from ₹25,981 crore to ₹35,747 crore (US$3.75 billion). The chart below plots both series and the foreign share of the total.
The committee's figures support the government's claim of a shift toward domestic suppliers, and the contract data point the same way. Of the 193 contracts signed in fiscal 2024-25, 177, or 92 percent, went to domestic industry and accounted for ₹1,68,922 crore (US$17.7 billion), or 81 percent of contract value, according to the ministry's account. The committee's report also noted that only six of 271 capital contracts signed in 2023-24 and the first half of 2024-25 were with foreign vendors. For fiscal 2026-27, the budget earmarked ₹1.39 lakh crore (US$14.6 billion), or 75 percent of the ₹1.85 lakh crore capital acquisition budget, for procurement from domestic industry, the ministry said on February 1.
Those shares measure who receives the contract, however, not where a weapon was designed or where its most valuable parts originate, and that distinction is where an independent dataset becomes useful. The Stockholm International Peace Research Institute (SIPRI) tracks deliveries of major conventional weapons using a trend-indicator value (TIV), a common unit that reflects the military resources transferred rather than the price paid. SIPRI's definition of a transfer includes production under license, as its fact sheet states, so weapons built in India under foreign license appear in its series as imports and reveal design dependence that a rupee-based domestic share can hide.
On SIPRI's measure, India's import dependence has fallen but has not collapsed. SIPRI's fact sheet of March 2026 ranked India as the world's second-largest arms importer in 2021-25, with 8.2 percent of global imports, down from 9.3 percent in 2016-20, and reported that its imports fell 4.0 percent between the two periods. Queries of the SIPRI Arms Transfers Database trade register, run for this analysis and matching the fact sheet, give the longer view in the table below.
| Period | India's imports (TIV, millions) | World imports (TIV, millions) | India's share of world imports |
|---|---|---|---|
| 2011–15 | 19,450 | 141,121 | 13.8% |
| 2016–20 | 13,188 | 141,219 | 9.3% |
| 2021–25 | 12,666 | 154,163 | 8.2% |
Table 2: India's major arms imports by five-year period. Source: SIPRI Arms Transfers Database, trade register queried October 30, 2026; IndraStra calculation. TIV measures volume of transfers, not price
The table shows that most of the decline came between the first two periods. India's imports fell about 35 percent from 2011-15 to 2021-25, but only 4 percent in the latest comparison, even as domestic capital spending more than doubled. SIPRI wrote that the decrease is "partly attributed to India's growing ability to design and produce its own weapons," while adding that "there are often substantial delays in domestic production." It also said that recent orders, "including up to 140 combat aircraft from France and 6 submarines from Germany," indicate India's "continued and probably increasing reliance on foreign suppliers."
The composition of supply has changed more than its volume, and that change carries its own lesson about dependence. Russia's share of India's imports fell from 70 percent in 2011-15 to 40 percent in 2021-25, while France's rose from under 2 percent to 29 percent, according to the SIPRI data. India took 48 percent of all Russian arms exports in 2021-25, SIPRI reported, so the relationship still matters greatly to both sides. The chart below traces the four largest suppliers across the three periods.
Diversification reduces exposure to any one supplier, yet the categories that continue to arrive from abroad show why supplier diversification is not the same as self-reliance. Based on IndraStra's grouping of SIPRI weapon descriptions, aircraft accounted for about 30 percent of India's import volume in 2021–25 and missiles for about 25 percent. Ships and submarines, armoured vehicles and air-defence systems accounted for most of the remainder, while engines and sensors together represented about 9 percent under the analysis's classification. These percentages reflect IndraStra's categorisation of SIPRI records rather than a standard set of categories published by SIPRI.
The category pattern is consistent with the AoN record of the past nine months, where the largest approvals have involved foreign-designed aircraft. The DAC's February 12, 2026 meeting cleared proposals worth about ₹3.60 lakh crore (US$37.8 billion), headlined by Multi Role Fighter Aircraft identified as the Rafale and by P-8I maritime reconnaissance aircraft, according to the ministry's release. The release stated that "the majority" of the fighters would be manufactured in India. If implemented under the proposed arrangements, locally manufactured aircraft could contribute to domestic procurement expenditure in the ministry's accounts while still being recorded as transfers from France in SIPRI's arms-transfer data. The approval itself, however, should not be treated as evidence that the procurement contract had been signed.
The industrial side of the ledger is where the self-reliance case is strongest, and production data show why the government treats it as proof of progress. India's defense production reached a record ₹1.78 lakh crore (US$18.7 billion) in fiscal 2025-26, up 15.6 percent from ₹1.54 lakh crore and roughly four times the ₹43,746 crore of fiscal 2013-14, the ministry said on June 17. Public sector companies produced about 76 percent and private firms about 24 percent, or roughly ₹42,000 crore. The chart below sets that production series beside exports.
Exports are the most visible output of that base, and their growth in the latest year was concentrated in a few places. Defence public sector undertakings (DPSUs) earned ₹21,071 crore (US$2.21 billion) from exports in fiscal 2025-26, up 151 percent, while private firms earned ₹17,353 crore (US$1.82 billion), up 14 percent, the April 2 release said. The ratio of exports to output gives a simple sense of scale.
Here, (e) is the export-to-production value ratio, calculated by IndraStra from official data; (X) is defence exports and (Q) is defence production, both measured in crore rupees for fiscal 2025–26. The ratio was approximately 21.6 percent, compared with about 1.6 percent in fiscal 2013–14, when exports were ₹686 crore. This comparison reflects the relative monetary values of exports and production; it does not measure the physical share of domestic output exported. Because a substantial part of the latest increase came from public-sector firms, a single year's performance does not establish a sustained trend.
The strongest objection to the argument here is that it measures self-reliance by the wrong yardstick. On that view, design origin matters less than control over production, maintenance and upgrades, and a fighter or submarine built in Indian yards under license, with rising local content, builds the workforce and supplier base that domestic design will later need. The ministry's Positive Indigenisation Lists, ten of which now cover 5,521 items that must be bought from domestic sources after set dates, according to a PIB factsheet, are designed to push that local content down into components. The September 7 meeting, with about 98 percent of its approvals going to Indian industry, suggests that for many categories the domestic option already exists.
The objection has merit for the long term but does not settle the present one. Licensed production leaves design authority with the foreign licensor, which is why SIPRI records it as an import, and engines and sensors still appear separately in India's import mix. The October 26 approval itself allotted about 18 percent to foreign sources, and the February approval centered on a foreign-designed fighter. The domestic share of capital acquisition spending rose because expenditure on domestic procurement increased much faster than expenditure on foreign procurement. Domestic spending climbed from ₹39,879 crore in fiscal 2014–15 to ₹93,377 crore in fiscal 2023–24, an increase of approximately 134 percent, while foreign spending rose from ₹25,981 crore to ₹35,747 crore, an increase of approximately 37.6 percent. The shift therefore reflects faster growth in domestic procurement, not a decline in the absolute value of foreign spending. Self-reliance in procurement spending and self-reliance in the design of top-tier platforms are therefore moving at different speeds, and current data support only the first as achieved.
What happens next will show whether the second can close the distance. A short list of markers will matter over the coming year. One key indicator will be the conversion of fiscal 2025–26's ₹6.81 lakh crore in approvals into contracts during fiscal 2026–27, which the ministry is likely to report around April 2027; a signing total well above ₹2.28 lakh crore would shrink the overhang. Another will be whether the domestic percentages stated at DAC meetings carry through to signed contracts, since the October 26 figure of 82 percent will mean little if the largest items end up as direct imports. Meanwhile, SIPRI's next five-year comparison will begin to capture deliveries from the 2026 aircraft and submarine decisions.
The implications differ by audience, and each can be stated concretely. For Indian industry, the ₹1.39 lakh crore domestic earmark for fiscal 2026-27 and an approval overhang of several lakh crore rupees mean that order books depend less on new approvals than on how quickly the ministry turns existing ones into contracts. For India's main suppliers, the data show a market that is shrinking only slowly in volume while shifting toward partners willing to license production locally, which favors France and Israel over Russia. For Parliament and auditors, the absence of a published, proposal-level record linking each AoN to its contract date and domestic share leaves the most important test of self-reliance unmeasured. Until that record exists, the strongest public evidence for Atmanirbhar defense will remain where it is today, in spending and production totals, while the arsenal's top tier continues to arrive by import or under foreign license.
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