Defence Acquisition Council Approves Rs 2.23 Lakh Crore Capital Acquisition Proposals

December 1, 2023

In a significant development on November 30, 2023, the Defence Acquisition Council (DAC), chaired by Raksha Mantri Shri Rajnath Singh, granted approval for Acceptance of Necessity (AoNs) for capital acquisition proposals worth Rs 2.23 lakh crore. This move aligns with the government’s commitment to enhancing the capabilities of the Indian Defence Industry and achieving the goal of ‘Aatmanirbharta.’

Domestic Sourcing Dominates Capital Acquisition

Out of the total AoN amount, which amounts to Rs 2.23 lakh crore, a staggering 98% (Rs 2.20 lakh crore) will be sourced from domestic industries. This substantial allocation underscores a strong push toward self-reliance and the ‘Make in India’ initiative within the defence sector.

Strategic Procurements for Indian Army

The DAC granted AoN for the procurement of two types of Anti-tank Munitions, namely, Area Denial Munition (ADM) Type – 2 and Type-3. These munitions possess the capability to neutralize Tanks, Armoured Personnel Carriers, and enemy personnel. Additionally, to replace the Indian Field Gun (IFG), which has completed its service life, AoN was granted for the procurement of a state-of-the-art Towed Gun System (TGS), set to become a mainstay for the Artillery forces of the Indian Army.

Enhancing Lethality and Safety

The AoN was also given for the 155 mm Nubless projectile for use in 155 mm Artillery guns. This strategic move aims to enhance both lethality and safety of the projectiles, and all these acquisitions for the Indian Army fall under the Buy (Indian-IDDM) category.

Naval Strength and Offensive Capability

For the Indian Navy, the DAC granted AoN for the procurement of Medium Range Anti-Ship Missiles (MRAShM) for surface platforms. Envisioned as a lightweight Surface-to-Surface Missile, the MRAShM is poised to be a primary offensive weapon on Indian Naval Ships.

Aircraft and Helicopter Procurements

The DAC also accorded AoNs for the procurement of Light Combat Helicopter (LCH) for the Indian Air Force (IAF) and Indian Army, along with Light Combat Aircraft (LCA) Mk 1A for the IAF from Hindustan Aeronautics Limited (HAL). These procurements fall under the Buy (Indian-IDDM) category.

Indigenous Content Mandate and Support for Start-ups/MSMEs

In a strategic decision to boost indigenisation, the DAC approved a major amendment in the Defence Acquisition Procedure (DAP) 2020. Henceforth, in all procurement cases, a minimum of 50% of indigenous content shall be in the form of material, components, and software manufactured in India. The DAC also aims to encourage start-ups and MSMEs’ participation in the defence ecosystem by considering them for Request for Proposal (RFP) issuances without stipulating financial parameters for cases with AoN cost up to Rs 300 crore, extendable to Rs 500 crore on a case-to-case basis with DPB approval.

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