DAP 2026: India's new defence procurement policy aims for indigenous tech sovereignty

Earlier this week, the defence ministry released Defence Acquisition Procedure (DAP) 2026 for stakeholder comments until March 3. As India moves from importing military equipment to building it indigenously, the question for policymakers is not whether India should pursue technological sovereignty, but how it should do so in a world where advanced military capabilities are rarely developed in isolation. By prioritising IP ownership, indigenisation and co-development, DAP 2026 sets a long-term vision for developing indigenous defence manufacturing ecosystems by the end of the next decade.

Owners, keepers India is importing less and building more of its own military equipment. Yet, key components and platforms still come from abroad. MoD has sought to import critical weapons technologies through 'Make in India' initiatives. Licence production remains central to modernisation, yielding platforms such as Scorpene-class submarines, Sukhoi Su-30MKI fighter jets, T-90 tanks, and BAE Systems Hawk advanced jet trainers (AJTs).

A common criticism is that such arrangements transfer only manufacturing capabilities, not design expertise. For example, the C-295 programme - a partnership between Airbus and Tata Advanced Systems (TASL) to manufacture military transport aircraft in India - will bring in critical aviation technologies. But Tata will not hold the design rights to modify or upgrade the platform.


India also struggles to secure meaningful technology transfers, as most countries are reluctant to share core proprietary technologies due to IP and security concerns. Stalled negotiations for HAL to manufacture GE's F414 jet engines, intended for the LCA Tejas Mk II and Amca Mk I, illustrate this. Although the proposal offered up to 80% tech transfer, the most-sensitive hot-section technologies were excluded, with talks stalled since 2023.

DAP 2026 seeks to reduce dependencies on foreign technology by focusing on Indian ownership of IP, source code, critical design data and upgrade authority, retained within majority Indian-owned and -controlled entities. This marks a shift from a 'Made in India' approach to an 'Owned by India' one. Accordingly, definition of an 'Indian vendor' or 'Indian firm' remains unchanged, resisting attempts to equate Indian subsidiaries of foreign OEMs with domestic companies in contract bids, a change consistently opposed by India's domestic industry.

IC silence Indigenous content (IC) framework signals a reset of India's defence offset architecture, which has long failed to deliver meaningful technology transfers. Since 2020, the offset policy has been progressively diluted, raising thresholds nearly 7x and exempting G2G deals and single-vendor purchases. Between March 2021 and March 2025, only one offset contract was signed.

While the 'Buy (Global)' category now mandates an IC percentage, it remains silent on automatic offset triggers, reflecting a shift from post-contractual offset mechanisms towards localisation embedded in main procurement contracts.

In practice, several major defence manufacturers have committed to establishing production facilities in India under G2G contracts. For example, General Atomics will assemble MQ-9B Predator drones locally, and Dassault will establish a maintenance, repair and overhaul (MRO) facility and fuselage manufacturing plant for Rafale fighter jets.

IC policy has been revised, raising minimum thresholds from 50% to 60%. Although these requirements have been exceeded in large indigenous programmes, such as LCA Tejas Mk I and indigenous aircraft carrier (IAC) INS Vikrant, they remain challenging for joint foreign-tech projects.

Although service headquarters can recommend lower IC for niche, technology-intensive equipment, this provision is rarely used. The industry has pushed for less rigid IC requirements, while chief of defence staff has criticised Indian industry for over-promising and under-delivering on IC and indigenous technologies.

Under DAP 2026, IC requirements will be phased in and gradually increased over the life of a programme, with parts manufactured in India, exported for processing, and then reimported counting towards IC. These changes are expected to drive deeper technology absorption and greater indigenisation.

Joining forces India relies on bilateral G2G partnerships to co-develop military capabilities. Successful examples include BrahMos supersonic cruise missile with Russia, and Barak 8 MR-SAM programme with Israel.

More recently, France's Safran has partnered with DRDO and its Gas Turbine Research Establishment (GTRE) to co-develop advanced jet engines for Amca under a G2G framework, offering full technology transfer, complete IP rights, and unrestricted authority to modify, upgrade and export. If realised, this could fundamentally reshape India's approach to defence technology development.

MoD is also reviewing timelines for phasing out long-standing bans on global arms manufacturers, particularly where upcoming collaboration programmes rely on them. During Keir Starmer's October 2025 visit, the India-Britain project to co-develop electric-powered naval engines with Rolls-Royce progressed to its next phase, with plans to negotiate a bilateral G2G defence agreement. Rolls-Royce has reiterated its offer of full tech transfer and joint IP ownership for next-gen aero engines for the Amca programme, although current restrictions limit procurement to existing platforms.

If DAP 2026 provides credible incentives for capability development, risk-sharing and long-term partnerships, it could unlock a new era of military platforms built on indigenous technologies. The move represents a strategic choice about India's place in the global defence ecosystem, rather than merely a defence procurement playbook.

The writer is former strategy director,BAE Systems India