India Clears ₹2.38 Lakh Crore Mega Defence Deal

New Delhi, March 28, 2026: In a major move to bolster India’s national security and modernize its armed forces, the Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, approved several capital acquisition proposals on March 27, 2026.

The total value of these approvals, known as Acceptance of Necessity (AoN), is estimated at approximately ₹2.38 lakh crore. This record-breaking surge in procurement aims to enhance the combat, surveillance, and mobility capabilities of the Indian Army, Air Force, and Coast Guard.+1

Strengthening the Skies: Indian Air Force (IAF)

The IAF emerged as a primary beneficiary of this round of approvals, focusing on both long-range defense and tactical mobility.

• S-400 Missile Systems: The DAC has cleared the procurement of five additional squadrons of the Russian-origin S-400 Triumf (Sudarshan) air defense system. This will eventually bring India’s total fleet to 10 squadrons, creating a formidable “national defense shield” capable of intercepting targets up to 400 km away.
• Medium Transport Aircraft (MTA): To phase out the aging Soviet-era AN-32 and IL-76 fleets, the council approved the acquisition of 60 Medium Transport Aircraft. In a significant push for Aatmanirbharta (self-reliance), 48 of these units are expected to be manufactured within India through tie-ups between global giants and domestic firms like Tata and Mahindra.
• Remotely Piloted Strike Aircraft (RPSA): The nod for four squadrons of advanced combat drones (UCAVs) marks a shift toward unmanned warfare. These will be used for high-precision strikes and stealth intelligence missions.+1
• Sukhoi Su-30 MKI Overhaul: The DAC approved a massive overhaul project for Su-30 aero-engines to extend the service life of the IAF’s mainstay fighter fleet.

Firepower and Surveillance: Indian Army

The Indian Army’s modernization focuses on enhancing artillery reach and secure battlefield communication.

• Dhanush Gun System: A follow-on order for 300 units of the indigenous Dhanush 155mm artillery gun (often called the “Desi Bofors”) was cleared.
• Air Defence Tracked System: New mobile systems were approved to provide real-time air defense coverage for moving columns, potentially including the Russian Pantsir-S1 or similar indigenous equivalents.
• Surveillance & Ammunition: The council cleared Runway Independent Aerial Surveillance Systems for vertical takeoff capabilities and high-lethality Armoured Piercing Tank Ammunition to boost anti-tank capabilities.

Maritime Security: Indian Coast Guard

For the Coast Guard, the DAC accorded AoN for Heavy Duty Air Cushion Vehicles (Hovercraft). These will be deployed for high-speed coastal patrolling, search and rescue operations, and logistics support in difficult maritime terrains.+1

A Record-Breaking Year for Defence

Defence Minister Rajnath Singh highlighted that the 2025-26 financial year has set a new benchmark for Indian defense procurement.

“The decisions taken in the DAC will help in further strengthening India’s defence preparedness. It’s heartwarming to note that these figures represent the highest procurement activity in any given financial year,” Singh stated.

These approvals signify the first step in a multi-year procurement process, involving technical trials and commercial negotiations before final contracts are signed. The focus remains heavily on “Made in India” initiatives, ensuring that a vast majority of this capital is reinvested into the domestic defense industrial ecosystem.