India Overhauls Defence Procurement With ‘Owned by India’ Strategy to Boost Strategic Autonomy

India is set to undertake a significant transformation in its defence procurement framework with the release of the Draft Defence Acquisition Procedure (DAP) 2026. The new policy marks a decisive shift from a focus on equipment that is merely manufactured in India to systems that are fully owned, designed, and controlled by Indian entities. The Ministry of Defence has made it clear that future military capability will be judged not only by local production, but by whether India retains control over intellectual property, source codes, system architecture, and upgrade pathways.

This doctrinal shift is aimed at ending long-term dependence on foreign suppliers that often accompanies licensed production and limited technology transfers. By prioritising co-development and domestic ownership of critical technologies, the government is seeking to position India as a global defence design and development hub rather than just a manufacturing base. The draft procedure, which will replace DAP 2020 after stakeholder consultation, reflects a broader push toward long-term technological sovereignty in defence.

The rate of technological change in AI, quantum computing, new technology drones and DEWs now outpaces the traditional 2–3-year acquisition cycle | Image credit: PIB | Business Standard

Faster Acquisition for AI, Drones, and Next-Generation Warfare

A central pillar of DAP 2026 is the recognition that traditional defence procurement timelines are no longer compatible with the pace of technological change. The Defence Ministry has acknowledged that areas such as artificial intelligence, quantum technologies, autonomous systems, cyber warfare, and directed energy weapons evolve far faster than conventional weapons platforms. As a result, the new framework proposes faster and more flexible procurement routes to ensure that emerging technologies can be inducted and upgraded rapidly.

The growing role of drones and unmanned systems has also been given special emphasis. Recent regional security developments and operational experiences have reinforced the importance of non-contact and technology-intensive warfare. Under India’s long-term modernisation roadmap, the armed forces are planning to induct hundreds of unmanned aerial vehicles, including high-altitude long-endurance platforms and radar-evading systems. This reflects a strategic shift toward drone-centric operations, surveillance, and precision strike capabilities that rely heavily on software, data, and continuous upgrades.

Civil-Military Fusion to Accelerate Innovation

The draft policy also institutionalises civil-military fusion, acknowledging that many cutting-edge military technologies now originate in the civilian sector. DAP 2026 encourages greater use of commercial off-the-shelf technologies in areas such as space systems, cybersecurity tools, drone swarms, and software platforms. This approach is designed to shorten development timelines and allow the armed forces to quickly adapt civilian innovations for military use.

By lowering entry barriers and encouraging participation from private firms, start-ups, and MSMEs, the policy seeks to strengthen India’s domestic defence innovation ecosystem. The emphasis on assured orders and smoother transition from prototype to production is intended to create a more predictable environment for defence technology developers. This is expected to deepen private sector participation and reduce over-reliance on a small number of traditional suppliers.

Redefining ‘Indian Vendor’ and Protecting Domestic Industry

DAP 2026 also tightens the definition of what qualifies as an “Indian vendor.” Wholly owned subsidiaries of foreign defence companies will not be treated as Indian vendors under key procurement categories that are meant to promote indigenous design and development. This move is aimed at ensuring that the benefits of preferential procurement routes flow to companies that are genuinely Indian-owned and controlled.

The policy reinforces the principle that domestic firms should retain ownership and control over core technologies and intellectual property. This is intended to prevent situations where foreign entities dominate high-value segments while Indian firms remain limited to low-value manufacturing roles. At the same time, the framework allows for selective foreign procurement where critical capability gaps exist, alongside parallel domestic development to gradually replace imports.

Defence Spending Linked to Economic Growth and Industrial Capacity

The draft procedure explicitly links defence capital spending to broader economic and industrial development. A large share of the defence capital budget continues to be reserved for procurement from Indian industry, ensuring that defence expenditure supports domestic manufacturing, supply chains, and high-end skill development. This approach is aligned with the government’s Atmanirbhar Bharat push and is designed to ensure that defence spending circulates within the domestic economy.

By tying defence modernisation to industrial growth, the policy aims to strengthen sectors such as electronics, semiconductors, precision engineering, and advanced materials. This linkage is also expected to support India’s growing defence export ambitions, as domestically designed and owned platforms are more likely to be marketed internationally without restrictions from foreign licensors.

The MGMM Outlook

India’s Draft Defence Acquisition Procedure (DAP) 2026 marks a decisive shift in defence policy by prioritising ownership, design control, and intellectual property over simple local manufacturing. The move signals a clear intent to break long-term dependency on foreign suppliers that often retain control over source codes, system upgrades, and core technologies. By redefining procurement priorities around Indian ownership and control, the policy strengthens strategic autonomy and positions India to move up the defence value chain. This also tightens the definition of Indian vendors, ensuring that genuinely Indian-owned firms benefit from preferential routes, while preventing foreign subsidiaries from dominating high-value segments under the guise of localisation.

The framework also reflects the changing nature of modern warfare, with faster procurement pathways for AI, drones, cyber systems, quantum technologies, and other next-generation capabilities. Emphasis on civil-military fusion and private sector participation is designed to accelerate innovation and shorten development cycles by tapping into India’s start-up and MSME ecosystem. Linking defence spending to industrial growth further reinforces Atmanirbhar Bharat by building domestic capacity in electronics, semiconductors, advanced materials, and precision engineering. Together, these shifts aim to transform India from a manufacturing base into a defence technology and design power, strengthening long-term military readiness while supporting industrial and export ambitions.

(Sources: Business Standard, Economic Times, Hindustan Times)