Policy Update
Pragya Raghav
Background
From DPP to DAP. India’s defence capital acquisition system initially operated without a single formal procedure. A basic framework had existed since 1992, but the first structured Defence Procurement Procedure, DPP 2002, came into force on 30 December 2002 and applied to “Buy” decisions of the Defence Acquisition Council (CAG, Defence Audit, cag.gov.in). Over the next 18 years, the procedure was revised eight times, in 2003, 2005, 2006, 2008, 2009, 2011, 2013 and 2016.
These revisions gradually expanded the framework, introducing offsets in 2005, “Make” and shipbuilding categories in 2006, and stronger indigenous content requirements in 2013 (CGDA, DPP 2013). In 2020, DPP was renamed the Defence Acquisition Procedure, DAP 2020, reflecting the shift towards Atmanirbhar Bharat. It introduced an import embargo list, a 50% Indian ownership requirement for “Indian Vendor” status, the Buy (Global Manufacture in India) route and provisions for leasing defence equipment (PIB, Ministry of Defence).
Why reform became necessary. The central problem was not the absence of rules, but the growing gap between procedural requirements and actual delivery. The procurement framework expanded from 84 pages in 2002 to around 800 pages by 2020, yet greater detail did not translate into faster acquisition (Raksha Anirveda). The prescribed procurement cycle of 74 to 106 weeks was frequently exceeded.
The Hawk 132 trainer programme, contracted in 2003, took nearly two decades to conclude, while the C 295 programme took more than a decade before deliveries began in 2021. CAG audits have repeatedly exposed similar delays. One audit recorded delays of 13 to 301 weeks against a 23 week norm for Army supply orders, with orders worth over ₹700 crore pending for up to 19 years (CAG press release, Ordnance/AOC audit).
CAG Report No. 28 of 2025 on Union Government Defence Services, Army further found that 72% of emergency procurement contracts were delayed, while 30% of indigenisation supply orders were foreclosed because of inadequate vendor response or manufacturing capacity. Artillery modernisation shows the longer term consequence: by March 2022, only 17% of the guns planned since 1999 had reached the contract stage and just 8% had been delivered.
Structural and strategic drivers. These outcomes point to problems that extend beyond individual provisions of the procurement procedure. The 12 stage process, from Acceptance of Necessity to contract, involves multiple agencies operating through separate chains of command. The absence of a dedicated procurement cadre has also been identified by former MoD officials as a structural constraint (raksha-anirveda.com).
This matters because repeated procedural revisions can simplify rules on paper without resolving coordination, accountability and capacity constraints within the acquisition system. At the strategic level, India’s continued dependence on imports for major platforms has added urgency to the reform agenda. Border tensions and emergency procurement of around ₹40,000 crore following Operation Sindoor have further highlighted the need to reduce acquisition timelines while building reliable domestic production capacity (PIB/CAG references, Demand for Grants 2026 27 analysis).
Why DAP 2026 matters. The Department of Defence released the draft DAP 2026 on 10 and 11 February 2026 and invited stakeholder comments until 3 March 2026. The draft is intended to replace DAP 2020 (PIB Press Release, PRID 2227775; MoD draft document). Its significance lies in its attempt to address both procedural delay and the limits of earlier indigenisation measures. The Ministry of Defence proposes fewer procurement categories, Indigenous Content thresholds moving towards 60%, TRL based acquisition, Long Term Bulk and Low Cost Capital routes, two stage trials and timeline monitoring from the Request for Information stage (PIB, MoD statement).
More importantly, the draft shifts the meaning of self reliance beyond domestic assembly. By giving greater weight to ownership of design, source code and upgrade rights, it seeks to ensure that critical technological capabilities remain under Indian control. MoD has described this transition as a move from “Made in India” to “Owned by India.”
Functioning
How the process works: Capital acquisition follows a defined sequence, beginning with the Request for Information (RFI), followed by formulation of Services Qualitative Requirements (SQRs), Acceptance of Necessity (AoN), Request for Proposal (RFP), Technical Evaluation Committee (TEC) scrutiny, Field Evaluation Trials, Staff Evaluation, Technical Oversight Committee review where required, Contract Negotiation Committee (CNC) proceedings, and final approval by the Competent Financial Authority (CFA) before the contract is signed (MP-IDSA, Decoding DAP 2020).
Capital acquisitions, covering platforms, weapons and major systems, generally pass through this full cycle and can take two to seven years from AoN to contract. Revenue procurement, which covers items such as spares, consumables and maintenance, follows separate and relatively shorter procedures through DDP and Service Headquarters portals.
Key institutions: The Ministry of Defence, through its Department of Defence Acquisition Wing, oversees the acquisition process. Service Headquarters of the Army, Navy and Air Force identify operational requirements and prepare SQRs. DRDO, DPSUs and Ordnance Factories contribute to decisions involving design, technology and indigenous development. The Directorate General of Quality Assurance is responsible for verifying technical compliance, while the Department of Defence Production handles industrial and offset-related matters. The DAP 2026 draft also gives the iDEX ecosystem a defined place in procurement, particularly for start-ups and innovation-driven solutions (PIB, MoD statement, PRID 2227775).
DAC and other acquisition bodies: The Defence Acquisition Council (DAC), established in 2001 following the recommendations of the Group of Ministers on Reforming the National Security System after the Kargil conflict, is the highest decision-making body for defence procurement. It is chaired by the Raksha Mantri and includes the Chief of Defence Staff, the three Service Chiefs, Defence Secretary and the Secretaries of Defence Production, R&D and Finance, with the Deputy Chief of Defence Staff (PP&FD) serving as Member Secretary (MoD; IASbaba, citing MoD data).
DAC approves the 15-year Long Term Integrated Perspective Plan, grants AoN, determines procurement categories and reviews major projects. The Defence Procurement Board, Defence Production Board and Defence R&D Board support the implementation of these decisions. After AoN, responsibility moves to specialised bodies. The CNC, with up to five members representing the user directorate, technical directorate, Integrated Finance Adviser and Cost Adviser, negotiates commercial terms within the prescribed 30-day period. The CFA then provides financial sanction, with its level of authority determined by the value of the contract (Make and Innovation Procedure, MoD Acquisition Wing).
Procurement categories/routes: DAP 2020 gives preference to categories that increase domestic participation. Buy (Indian-IDDM) covers equipment that is indigenously designed, developed and manufactured, with a minimum 50% indigenous content requirement. Buy (Indian) requires manufacture in India with at least 60% indigenous content. Buy and Make (Indian) involves transfer of foreign technology to an Indian production partner, while Buy (Global-Manufacture in India) requires a foreign OEM to manufacture in India. Buy (Global) permits direct imports where suitable Indian alternatives are unavailable (ORF, DAP 2020: Imperatives for Further Reforms; Defence Standard).
Separate routes apply to Make-I, Make-II and Make-III projects, the Strategic Partnership Model and DRDO/DPSU-led development. The import embargo list also restricts specified platforms to indigenous-preference routes (Lexology, citing MoD notification). The DAP 2026 draft proposes fewer categories, along with Long Term Bulk Acquisition and Low-Cost Capital Acquisition routes, while moving Indigenous Content requirements towards 60% (PIB, MoD).
Where deliberation and consultation enter: Decision-making is spread across multiple stages rather than concentrated in one authority. DAC provides the initial policy clearance, Service Headquarters review SQRs, and TEC and TOEC examine technical and offset-related proposals. The CNC provides a collective forum for commercial negotiations, followed by CFA approval (MP-IDSA).
Parliamentary oversight adds another layer, with the Standing Committee on Defence examining Demands for Grants and progress in capital acquisition each year (PRS, Demand for Grants 2026-27 Analysis, citing Standing Committee reports). CAG subsequently audits procurement outcomes and implementation. Consultation also shaped DAP 2026: the draft was released on 10 and 11 February 2026, with comments invited from industry and other stakeholders until 3 March 2026 before finalisation (PIB, PRID 2227775; MoD draft document).
Performance
Where the numbers show gains: Defence capital expenditure increased from ₹94,587.95 crore in 2014-15 to ₹2.19 lakh crore in 2026-27. Indigenous defence production reached a record ₹1.78 lakh crore in 2025-26, with DPSUs accounting for 76% and private industry 24% (PIB, The Defence Decade). The figure represents the value of defence production within India and therefore indicates the expanding scale of the domestic manufacturing base, rather than the value of equipment that is entirely Indian-designed or free of imported components. It is broadly comparable with the Ministry’s earlier production figures, including ₹46,429 crore in 2014-15, although the long-term rise should not be treated as a direct measure of technological self-reliance.
Defence exports also increased from ₹686 crore in 2013-14 to ₹38,424 crore in 2025-26, reaching over 80 countries (PIB, The Defence Decade). Together, these figures show a significant expansion of India’s domestic defence industry, while leaving open the more important question of how much of this production rests on Indian design, technology and intellectual property.
Where the record remains weak: Higher production and approvals have not resolved long-standing delays in procurement and delivery. CAG Report No. 28 of 2025 found that 72% of Army emergency procurement contracts were delayed, while 30% of indigenisation supply orders were foreclosed due to inadequate vendor response, development difficulties or unavailable materials.
Artillery modernisation shows the problem over a longer period. Of the 2,800 guns planned by 2027, only 17% had reached the contract stage and 8% had been delivered by March 2022, despite the programme dating back to 1999. Another CAG audit recorded delays of 13 to 301 weeks against a prescribed 23-week norm for Army supply orders, with orders worth over ₹700 crore pending for periods ranging from one to 19 years.
What the evidence suggests: The data point to a mixed picture. India has expanded defence production, exports, spending and indigenous participation, particularly at the approval stage. However, these gains have not consistently translated into timely contracts, production and delivery. The main weakness therefore lies less in generating procurement proposals or setting indigenisation targets and more in converting approvals into outcomes.
DAP 2026 is important in this context because its proposed simplification of procurement categories, monitoring from the RFI stage, two-stage trials and new routes such as Long-Term Bulk and Low-Cost Capital are intended to reduce procedural delays and improve execution. Its effectiveness will ultimately depend on whether these changes translate into faster contracting, production and delivery, rather than merely faster approvals.
Impact
Capability development: Operation Sindoor in May 2025 provided a recent test of India’s defence capabilities. PIB reported the use of indigenous air defence, electronic warfare and drone systems, including the Akash missile and layered air defence networks, during the operations (PIB, Operation Sindoor: The Rise of Aatmanirbhar Innovation, 14 May 2025). The operation also highlighted areas where additional capability was required. On 9 May 2025, a special DAC meeting cleared urgent capital acquisition cases under Emergency Procurement 2025, while DRDO offered 28 systems to the Services for emergency purchase.
Post-operation assessments identified requirements in areas including Unmanned Aerial Systems, Counter-UAS and Loitering Munitions. These gaps should not, however, be attributed solely to procurement delays, as they may also reflect evolving operational requirements and emerging technology needs. The episode therefore illustrates both the progress of indigenous capability and the need for procurement processes to respond more quickly to changing battlefield requirements.
Indigenisation and industry: The Positive Indigenisation Lists have turned import restrictions into assured opportunities for domestic manufacturers. Six phases have been issued, with the latest, released in August 2026, covering 405 items and an estimated business potential of ₹3,070 crore (PIB linked notifications).
The SRIJAN portal has added more than 33,000 items for indigenisation. Private industry accounted for 24% of India’s record ₹1.78 lakh crore defence production in 2025-26, while measures such as the ₹1 lakh crore Research, Development and Innovation Scheme and higher FDI limits seek to expand its role (PIB, The Defence Decade; Defence Atmanirbharta). The impact is therefore not limited to replacing imports; procurement policy is gradually creating a wider domestic industrial base involving private firms, MSMEs and start ups.
Transparency and accountability: The acquisition system contains several checks, including DAC approval, SQR scrutiny, CNC negotiations, CFA sanction, Integrity Pact provisions, Parliamentary review and CAG audits (MP-IDSA; PRS, Demand for Grants 2026-27 Analysis). Yet these safeguards have not consistently produced timely execution. CAG findings on delayed contracts and foreclosed indigenisation orders indicate that having multiple approval stages does not automatically ensure accountability. Former MoD officials have also pointed to the number of agencies and layered decision making as sources of delay (raksha-anirveda.com).
Strategic autonomy: DAP 2026 places greater emphasis on who controls defence technology, rather than simply where equipment is manufactured. Its proposed shift from “Made in India” to “Owned by India” gives greater importance to Indian ownership of design, source code and upgrade rights (MoD draft DAP 2026; PIB). This distinction matters for long term autonomy because licensed assembly does not provide the same control over upgrades, technology and future exports as domestic ownership of critical intellectual property. With defence exports rising from ₹686 crore in 2013-14 to ₹38,424 crore in 2025-26 across more than 80 countries, control over technology is increasingly relevant to both military capability and India’s position as a defence producer (PIB, The Defence Decade).
Emerging Issues
Timelines without enforcement: The Standing Committee on Defence, in its 2026-27 report on Capital Outlay, Defence Planning and Procurement Policy, stressed that defence procurement must have clear delivery timelines because delays can make equipment and technology outdated before induction (Standing Committee on Defence, Lok Sabha, March 2026, cited via bharatshakti.in). This reflects a problem repeatedly identified by CAG. The issue is therefore not simply setting timelines, but ensuring that delays carry consequences and that responsibility for slippage is clearly assigned.
Budget utilisation remains uneven: Capital outlay was underutilised in several years between 2011-12 and 2015-16 and again from 2022-23, with ₹12,232 crore reportedly unspent in 2024-25 (Standing Committee on Defence data, cited via raksha-anirveda.com). MoD later reported full utilisation of the ₹1.86 lakh crore capital allocation in 2025-26, for the second consecutive year, alongside 109 AoNs worth ₹6.81 lakh crore (Swarajya, citing Ministry data). The key question is whether this higher spending reflects a sustained improvement in procurement capacity or a temporary acceleration following Operation Sindoor.
Structural problems remain: DAP 2026 cannot by itself resolve institutional weaknesses that have accumulated over time. A former Financial Adviser (Acquisition) at MoD has questioned whether the 20-day consultation period for an 800-page-plus draft allowed meaningful stakeholder participation (raksha-anirveda.com). More fundamentally, multiple agencies, the absence of a dedicated acquisition cadre and weak outcome-based execution remain outside the scope of a procedural document. Simplifying rules will have limited effect if the institutions implementing them remain fragmented.
Indigenisation: breadth versus depth: Domestic participation has expanded, but production remains concentrated among DPSUs, which accounted for 76% of the ₹1.78 lakh crore defence output in 2025-26, compared with 24% for private industry (PIB, The Defence Decade). FDI has also remained limited: ₹2,273.94 crore entered the defence sector between September 2020 and December 2025 despite liberalised rules (Standing Committee on Defence, FY 2026-27, cited via The Wire). This raises a broader policy question about whether increased domestic production is also generating deeper technology transfer, private sector capability and indigenous R&D.
New technology is testing the system: Post Operation Sindoor assessments identified gaps in Unmanned Aerial Systems, Counter UAS and Loitering Munitions. These shortcomings show that the acquisition system can struggle when technology develops faster than established procurement cycles. DAP 2026’s TRL based acquisition and Fast Track provisions are intended to address this, but their effectiveness will depend on how quickly they can move genuinely emerging technologies from development to deployment.
“Owned by India” remains untested: DAP 2026 places greater emphasis on Indian control over design, source code and upgrades. However, there is still limited evidence on how many advanced platforms can meet this standard given India’s existing design and systems integration capacity. The shift therefore represents an important policy objective, but its success will ultimately depend on whether procurement reform is matched by sustained investment in indigenous technological capability.
Way Forward
Finalise and implement: DAP 2026 was expected to come into effect from 1 April 2026, but more than six months later it remains unfinalised, leaving procurement under DAP 2020 (BDB India, citing the rollout timeline). The immediate priority is therefore to complete the process and apply the new framework to actual procurements. A draft cannot improve acquisition timelines until its provisions are operational.
Fix execution, not just categories: CAG has previously recommended an integrated defence acquisition organisation to address “diffused coordination, defused accountability and delay in procurement” (CAG, Defence Audit, cag.gov.in). DAP 2026 reduces and reorganises procurement categories, but this addresses classification rather than the deeper problem of multiple agencies and overlapping chains of responsibility. A dedicated acquisition organisation staffed by trained procurement professionals would address this institutional gap more directly (Mondaq/JSA Prism; raksha-anirveda.com).
Make timelines enforceable: The Standing Committee on Defence has called for firm delivery timelines, but deadlines have existed in successive DPP and DAP frameworks without preventing prolonged delays in programmes such as the Hawk 132 and artillery modernisation. The missing element is accountability when deadlines are breached. DAP 2026’s proposal to monitor timelines from the RFI stage is useful, but it will matter only if delays are publicly tracked, responsibility is identified and corrective action follows (PIB, MoD statement).
Provide stable funding: MoD reported full utilisation of its ₹1.86 lakh crore capital allocation in FY 2025-26, following several years of underspending, including ₹14,602 crore in 2014-15 and ₹12,232 crore in 2024-25 (Standing Committee data; MoD figures). The longer-term issue is funding predictability. A non-lapsable defence modernisation fund, recommended repeatedly including by the 15th Finance Commission, remains unresolved. The government has cited constitutional constraints, while the 16th Finance Commission made no recommendation on the matter (PRS, Demand for Grants 2026-27 Analysis). A stable funding mechanism would make long-term acquisition planning less dependent on yearly utilisation patterns.
Build capability, not just capacity: Private industry accounted for 24% of defence production in 2025-26, compared with 76% for DPSUs, while FDI since 2020 stood at ₹2,273.94 crore (Standing Committee report, FY 2026-27). This makes the “Owned by India” approach dependent on strengthening India’s own design and technology base. Technology Development Fund support, iDEX orders and Positive Indigenisation Lists can create demand, but the harder task is developing domestic capability in advanced systems. The gaps identified after Operation Sindoor in UAS, Counter UAS and loitering munitions show where this capacity needs to grow.
In sum, DAP 2026 addresses some weaknesses in the existing framework through simpler categories, stronger indigenous requirements and new acquisition routes. Its larger test, however, lies outside the wording of the procedure: whether institutions can execute faster, whether delays carry consequences, whether funding remains predictable and whether domestic firms can move from production and assembly to genuine design ownership. These factors will determine whether the reform produces a measurable change in defence acquisition.
References
Comptroller and Auditor General of India. (n.d.). Defence audit (Chapter 8, Thematic history). Government of India. https://cag.gov.in/uploads/cag_pdf/thematic_history/chap_8.pdf
Comptroller and Auditor General of India. (2022, March 27). Performance audit on artillery gun modernisation [Report tabled in Parliament]. As cited in The Tribune. https://www.tribuneindia.com/news/nation/artillery-programme-delayed-by-two-decades-says-cag-report-491905/amp
Comptroller and Auditor General of India. (2025). Report No. 28 of 2025 – Union Government (Defence Services – Army), year ended March 2023. Government of India. As cited in The Wire. https://m.thewire.in/article/security/cag-flags-delays-in-72-army-emergency-procurement-contracts-objects-to-regularising-deviations
Comptroller and Auditor General of India. (n.d.). Delays in Army Ordnance Corps procurement [Press release, report tabled in Lok Sabha]. As cited in Deccan Herald. https://www.deccanherald.com/amp/story/india/cag-pulls-up-army-ordnance-corp-for-delay-in-placing-orders-1128026.html
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Ministry of Defence, Government of India. (2020). Chapter III: Procedure for procurement under ‘Make’ and ‘Innovation’ categories. https://makeinindiadefence.gov.in/public/upload/writereaddata/Make_Procedure.pdf
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About the Contributor
Pragya Raghav is pursuing a B.A. (Hons.) in History at Mata Sundri College for Women, University of Delhi, with a minor in Political Science. She is passionate about public policy, international relations, governance, climate policy, and sustainable development. Through research and policy analysis, she aims to contribute to evidence-based policymaking and create meaningful social impact.
Acknowledgement
I sincerely thank IMPRI for giving me the opportunity to undertake this policy research on India’s Defence Acquisition Procedure 2026 and its implications for defence procurement, indigenisation and strategic autonomy. I am grateful to Arjun Sir and the entire IMPRI team for their guidance, support and valuable feedback throughout the research process. I would also like to thank my fellow interns and peers for their support and thoughtful discussions, which helped me develop a better understanding of the subject and made this research experience meaningful and enriching.
Disclaimer : The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views, policies, or positions of IMPRI (Impact and Policy Research Institute) or any other affiliated organisation.
Name of the reviewer: Kaustav Majumdar and Khushi
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