India’s Defense Acquisition Council (DAC), under the chairmanship of Raksha Mantri, has agreed to the approval of Acceptance of Need (AoNs) for various Capital Acquisition Proposals amounting to Rs 2.23 crore (approx. 27.6 billion), of which procurement worth Rs 2.20 crore (98% of the total AoN amount) will be sourced from domestic industries. This will substantially boost the Indian defense industry’s ability to achieve the goal of being “Made in India.”
The DAC has also granted the AoN the acquisition of two types of anti-tank munitions: the Area Denial Munition (ADM) Type-2 and Type-3, which can neutralize tanks and armored personnel carriers and enemy personnel.
To replace the Indian Field Gun (IFG), which has completed its useful life, the AON has been awarded the procurement of a state-of-the-art Towed Gun System (TGS) that will become a mainstay of the artillery forces of the Indian army. The AoN has also granted the purchase of Nubless projectiles for use in 155mm artillery guns, improving the lethality and safety of the projectiles. All these equipment of the Indian Army will be procured under the Purchase category (India-IDDM).
AoN has also been granted for the acquisition and integration of Automatic Target Tracker (ATT) and Digital Ballistic Computer (DBC) for T-90 tanks in the Buy (India) category, which will help maintain the combat advantage of the T-90 tanks on enemy platforms.
The AoN for procurement of Medium Range Anti-Ship Missiles (MRAShM) for surface platforms of the Indian Navy under the Purchase (India-IDDM) category has also been agreed upon. The MRAShM is a light surface-to-surface missile that will be the main offensive weapon on board Indian Navy ships.
Additionally, the DAC awarded the procurement of Light Combat Helicopters (LCH) for the Indian Air Force (IAF) and Indian Army and Light Combat Aircraft (LCA) Mk 1A for the IAF from Hindustan Aeronautics Limited (HAL) under the category Buy (Indian-IDDM).
AoNs have also been granted by the DAC to upgrade HAL’s Su-30 MKI aircraft. While acquiring this equipment will provide enormous strength to the IAF, the acquisition of domestic defense industries will take indigenous capability to new heights. It will also substantially reduce dependence on foreign original equipment manufacturers (OEMs).
Furthermore, the DAC has approved a significant amendment to the Defense Procurement Procedure (DAP) 2020 to maximize local manufacturing. It has been decided that from now on, in all categories of procurement cases, a minimum of 50% of the indigenous content will be in the form of material, components and software manufactured in India. To calculate indigenous content, the cost of an annual maintenance contract (AMC)/comprehensive maintenance contract (CMC)/after-sales service will be excluded.
Furthermore, the DAC has decided to encourage further the participation of start-ups/SMEs in the defense ecosystem. For all procurement cases with a resource allocation cost of up to Rs 300 million, registered SMEs and recognized start-ups will be considered for issuance of Request for Proposal (RFP) without any stipulation of financial parameters, which can be further relaxed with the approval of the Defense Acquisition Board (DPB) for the cost of resource allocation of up to Rs 500 million on a case-by-case basis.
Indian Ministry of Defense