India has fast-tracked its defence capabilities with the Defence Acquisition Council (DAC) granting a record high 55 Acceptance of Necessity (AoN) proposals amounting to ₹6.73 lakh crore in the financial year 2025-26.

Further, capital procurement contracts have been signed for 503 proposals amounting to ₹2.28 lakh crore in the current fiscal year. Both the quantum of AoN given and the number of capital contracts signed so far have been the highest in any given Financial Year.

Most recently, the DAC, chaired by Defence Minister Rajnath Singh on March 27, granted AoN for various proposals worth an estimated cost of about ₹2.38 lakh crore. These include 5 additional units of the Russian-made S-400 long-range surface-to-air missile system and 155mm Dhanush howitzer gun systems.

AoN is also given for about 60 medium transport aircraft,  to replace IAF’s ageing transport fleet, AN32 and IL-76. For the Army, the DAC has given approval for air defence tracked systems, armour-piercing tank ammunition, high-capacity radio relay, runway-independent aerial surveillance system and 155mm Dhanush gun systems. For the IAF, the DAC approval is for remotely piloted strike aircraft and overhaul of Su-30 aero engine aggregates to increase the service life of IAF’s mainstay combat aircraft. For the Indian Coast Guard, the DAC accorded AoN for heavy-duty air cushion vehicles, used for multipurpose maritime coastal operational roles, including high-speed coastal patrolling, reconnaissance, search and rescue operations.

Major contracts during the year include the procurement of 97 Light Combat Aircraft (LCA) Mk1A by Hindustan Aeronautics Limited (HAL) for over Rs 62,370 crore in September. The delivery of these aircraft would commence during 2027-28 and be completed over a period of six years. The order includes 68 fighters and 29 twin-seaters and the aircraft will have an indigenous content of over 64%.

HAL has an agreement with General Electric Company, USA for the supply of 113 F404-GE-IN20 engines and a support package for the execution of the 97 LCA Mk1A programme. The engine deliveries would be from 2027 to 2032. The Ministry of Defence, on March 28, 2025, signed two contracts with HAL for supply of 156 Light Combat Helicopters (LCH) - Prachand, along with training and other associated equipment worth Rs 62,700 crore. The first contract is for the supply of 66 LCHs to the Indian Air Force and the second is for the supply of 90 LCHs to the Indian Army. The supply of these helicopters shall commence from the third year and will be spread over the next five years. This helicopter has a large number of components designed and manufactured in India, and plans are to have an overall indigenous content of over 65% during the execution of this procurement.

India and France signed an Inter-Governmental Agreement (IGA) in April 2025 for the procurement of 26 Rafale Aircraft (22 Single-Seater and four Twin-Seater) for the Indian Navy, worth Rs 63,000 crore. The agreement includes the transfer of Technology for the integration of indigenous weapons, setting up of production facilities for Rafale Fuselage as well as maintenance, repair, and overhaul (MRO) facilities for aircraft engines, sensors and weapons in India. The delivery of these aircraft would be completed by 2030.