New Delhi: India is planning major defence procurement reforms and a DRDO overhaul to speed up military equipment purchases, strengthen domestic manufacturing, and increase private-sector participation.
Defence Secretary Rajesh Kumar Singh outlined these priorities at the Society of Indian Defence Manufacturers (SIDM) Annual Session in New Delhi on October 9, 2026.
The proposed changes aim to improve India’s defence production capabilities, reduce dependence on foreign suppliers, and create more opportunities for Indian companies. The government also wants to maintain transparency and follow proper rules while speeding up important defence projects.
Defence Reforms 2026: India Plans Major Defence Procurement Reforms
India wants to make its defence procurement process faster and more efficient. Defence procurement means purchasing weapons, aircraft, missiles, military vehicles, and other equipment for the armed forces.
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According to the report published by Indian Defence News, several major procurement programmes are being processed at senior government levels. These include the Multi-Role Fighter Aircraft (MRFA) programme and jet-engine-related projects. However, faster procurement does not mean ignoring established procedures. The Defence Secretary stressed the importance of following legal requirements and maintaining accountability during major military purchases. The objective is to reduce unnecessary delays while ensuring that defence contracts are awarded through proper procedures.
What is the Reason of DRDO Overhaul 2026
The Defence Research and Development Organisation (DRDO) plays an important role in developing India’s indigenous defence technologies. Its work includes missiles, radar systems, electronic warfare equipment, military platforms, and other advanced technologies.
The report states that the government is considering changes to DRDO’s organisational structure. These changes are intended to clarify responsibilities and allow scientists to spend more time on research and development. The proposed reforms could also reduce administrative work and improve project accountability.
Conventional Missile Technology May Move To Private Industry
One important development mentioned in the report is the proposed transfer of production responsibilities for conventional missile systems to capable private-sector companies.
The reported plan is to transfer technology for conventional missile systems by November 2026, subject to the relevant arrangements and implementation. This approach could allow DRDO to focus more heavily on advanced research, new technologies, and strategically important defence programmes.
Private companies could contribute their manufacturing facilities, engineering expertise, and production capacity to increase output. However, the exact systems, companies, and transfer arrangements would need to be confirmed through official announcements.
Defence Reforms 2026: DRDO Laboratories May Be Consolidated
The Defence Secretary reportedly indicated that DRDO’s resources are spread across a large network of laboratories.
The organisation has approximately 33 laboratories, according to the report. The proposed restructuring could examine whether some facilities and responsibilities need to be consolidated.
The purpose would be to reduce duplication, improve coordination, and use available resources more effectively. A more focused research structure could help scientists concentrate on important defence technologies instead of spending excessive time on administrative responsibilities. Any final restructuring would depend on the government’s approved plans.
Defence Reforms 2026: Private Defence Companies May Get A Bigger Role
India is working to build a stronger domestic defence industry by involving private manufacturers, public-sector companies, startups, and micro, small and medium enterprises (MSMEs).
According to the report, private companies currently account for around 21% to 25% of India’s defence production value. The reported long-term objective is to increase the private sector’s contribution to at least 50% of defence production. This would represent a major change in India’s defence manufacturing ecosystem.
Private companies could gain more opportunities in areas such as missile production, aircraft components, electronics, communication systems, drones, and military equipment. Greater participation could also encourage investment in factories, research facilities, skilled workers, and advanced manufacturing technologies.
₹17 Lakh Crore Defence Industry Opportunity
One of the most important points in the report is the estimated long-term opportunity for India’s domestic defence industry.
The report places the potential domestic market at approximately ₹17 lakh crore to ₹21 lakh crore over the next decade. This is an industry opportunity estimate, not a confirmed government order or guaranteed revenue for defence companies.
The opportunity could come from military modernisation, domestic procurement, replacement of imported equipment, and the development of new technologies. Indian manufacturers may benefit if they can meet the armed forces’ requirements for quality, reliability, delivery schedules, and competitive pricing. The government has also been promoting domestic defence production as part of its broader self-reliance strategy.
75% Of Defence Capital Procurement Budget Reserved For Domestic Industry
The report states that the government has reserved 75% of the defence capital procurement budget for domestic industry in recent Union Budgets.
It also reports an increase from 68% in FY2022–23. Capital procurement refers to spending on major military equipment and long-term assets, rather than routine operating expenses. This policy can support Indian manufacturers by directing a substantial share of eligible defence capital purchases towards domestic suppliers.
The official Ministry of Defence continues to publish information on indigenous procurement and efforts to expand India’s defence manufacturing capabilities.
For example, the Defence Acquisition Council approved acquisition proposals worth approximately ₹1.10 lakh crore on September 7, 2026. These approvals covered various requirements of the armed forces. Such approvals represent an important stage in the procurement process, but they should not automatically be treated as completed contracts.
Government Wants Faster Defence Project Execution
The Defence Secretary also highlighted the need to improve project management and reduce delays. Defence projects often involve complex design requirements, testing, technical evaluations, financial approvals, and manufacturing arrangements. Delays in any of these areas can affect the delivery of important equipment to the armed forces.
The proposed reforms aim to improve coordination between government departments, research organisations, and defence manufacturers. Better planning and accountability could help projects move from development to production more efficiently. The government must still balance speed with safety, technical standards, transparency, and the operational needs of the military.
Defence Acquisition Procedure Reforms Support Self-Reliance
The proposed changes are part of India’s wider effort to improve defence procurement and strengthen domestic manufacturing.
The Ministry of Defence has already outlined procurement reforms through the Defence Acquisition Procedure (DAP) 2026 framework.
According to an official Ministry of Defence release published by the Press Information Bureau on February 13, 2026, the draft DAP 2026 proposed measures to simplify procurement categories, strengthen indigenous content requirements, improve trial procedures, and accelerate the acquisition of emerging technologies.
The draft also proposed changes intended to give Indian manufacturers greater opportunities to design, develop, and produce defence equipment.
These measures support the wider objective of reducing dependence on imported military systems and developing domestic technical capabilities. The final impact will depend on how the proposals are implemented and how quickly defence projects move through approval, testing, contracting, and production.
What Defence Reforms 2026 Mean For Indian Defence Manufacturers
If the proposed reforms are implemented effectively, Indian defence manufacturers could benefit in several ways.
- More business opportunities: Greater domestic procurement could create demand for locally manufactured equipment and components.
- Better access for private companies: Private firms could receive more opportunities to participate in defence production and technology development.
- Growth for MSMEs and startups: Smaller companies could supply components, electronics, software, engineering services, and specialised technologies.
- More research and investment: Clearer project requirements could encourage companies to invest in advanced manufacturing and research.
- Stronger supply chains: Greater domestic production could reduce dependence on foreign suppliers for selected defence technologies.
- Potential employment growth: Expanding manufacturing and research activities could create jobs for engineers, technicians, scientists, and skilled workers.
However, these potential benefits are not guaranteed. Companies must still compete for contracts, meet military standards, manage production costs, and deliver equipment on time.
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FAQs
The reported plans include clarifying responsibilities, reducing administrative work, reviewing the laboratory structure, and transferring certain conventional missile production technologies to capable private-sector companies. The specific implementation details require official confirmation.
India’s defence procurement reforms aim to make military equipment purchases more efficient, improve accountability, encourage domestic manufacturing, and increase private-sector participation while maintaining proper procurement procedures.
The report estimates a potential domestic defence industry market of approximately ₹17 lakh crore to ₹21 lakh crore over the next decade. This is an estimated market opportunity, not a confirmed order book or guaranteed revenue for defence companies.
