Rupal Kalebere
February 2026 saw a series of significant developments across India’s defence ecosystem spanning budgetary expansion, procurement approvals, indigenous capability development, missile testing, and international maritime engagement. The Union Budget 2026-27 allocated a record ₹7.85 lakh crore to defence, signalling sustained emphasis on military modernisation and domestic defence manufacturing.
Major procurement proposals worth ₹3.60 lakh crore were cleared to strengthen air, land, and maritime capabilities, including multi-role fighter aircraft, maritime surveillance systems, and upgrades to existing armoured platforms. Indigenous defence production continued to advance through new contracts and reforms, while the draft Defence Acquisition Procedure (DAP) 2026 proposed structural changes to accelerate procurement and increase indigenous content.
Operational capability developments included the successful demonstration of Solid Fuel Ducted Ramjet propulsion technology, flight trials of the indigenous VSHORADS air defence system, and the test launch of the Agni-3 intermediate-range ballistic missile. In the maritime domain, the Indian Navy assumed command of Combined Task Force 154 and prepared to commission INS Anjadip, enhancing India’s role in both regional security and indigenous naval capability.
Together, these developments reflect India’s continued transition toward a technologically advanced, self-reliant, and internationally engaged defence posture.
Defence Budget & Capability Development
Record Defence Budget Signals Accelerated Modernisation
India’s Union Budget 2026-27 allocated a record ₹7.85 lakh crore to the Ministry of Defence, representing a 15% increase over FY 2025-26 and approximately 2% of India’s GDP. Defence spending now accounts for 14.67% of total central government expenditure.
A major share of the budget of ₹2.19 lakh crore has been allocated for capital expenditure, marking a significant increase in funding for military modernisation. Of this, ₹1.85 lakh crore has been earmarked for capital acquisitions including fighter aircraft, naval vessels, unmanned systems, missiles, and specialised military vehicles.
The budget also reinforces India’s Aatmanirbhar Bharat defence strategy, with ₹1.39 lakh crore (approximately 75% of the capital acquisition budget) reserved for procurement from domestic defence industries.
Additional allocations include ₹29,100 crore for DRDO research and development, ₹1.71 lakh crore for defence pensions, and ₹12,100 crore for the Ex-Servicemen Contributory Health Scheme (ECHS) to enhance healthcare services for veterans.
Defence Procurement & Force Modernisation
DAC Clears ₹3.60 Lakh Crore in Capital Acquisition Proposals
The Defence Acquisition Council (DAC) approved Acceptance of Necessity (AoN) for procurement proposals worth approximately ₹3.60 lakh crore, covering the Indian Air Force, Army, Navy, and Coast Guard.
For the Indian Air Force, approvals include procurement of Multi-Role Fighter Aircraft (MRFA), combat missiles, and Air-Ship Based High Altitude Pseudo Satellite (AS-HAPS) systems. These capabilities are intended to strengthen air dominance, deep-strike capability, and persistent intelligence, surveillance, and reconnaissance operations.
For the Indian Army, approvals include procurement of Vibhav anti-tank mines and overhaul of existing platforms including T-72 tanks, BMP-II infantry combat vehicles, and armoured recovery vehicles, extending service life and improving operational readiness.
For the Indian Navy, approvals include acquisition of P-8I long-range maritime reconnaissance aircraft and 4 MW marine gas turbine-based electric power generators under the Make-I category, supporting both maritime surveillance and indigenous shipboard systems.
The Indian Coast Guard will also procure electro-optical/infra-red systems for Dornier aircraft, improving maritime surveillance capability.
Defence Industry & Indigenous Manufacturing
Yantra India Limited Granted Miniratna Category-I Status
The Government granted Miniratna Category-I status to Yantra India Limited (YIL), enhancing the operational autonomy of the defence public sector enterprise. The status allows the company’s board to approve capital expenditure projects up to ₹500 crore without government approval, enabling faster expansion and modernisation.
Since its formation following the 2021 corporatisation of the Ordnance Factory Board, YIL has expanded significantly, with sales increasing from ₹956 crore in FY 2021-22 to over ₹3,108 crore in FY 2024-25, along with growing export activity.
The development reflects broader reforms aimed at transforming former ordnance factories into efficient, competitive, and export-oriented defence manufacturers.
MoD Signs ₹2,312 Crore Contract with HAL for Dornier Aircraft
The Ministry of Defence signed a ₹2,312 crore contract with Hindustan Aeronautics Limited (HAL) for the procurement of eight Dornier 228 aircraft for the Indian Coast Guard under the Buy (Indian) category.
The aircraft will support maritime surveillance, coastal security operations, and search-and-rescue missions, strengthening India’s maritime security architecture. The programme will also generate employment across HAL’s supply chain and support a network of MSMEs and ancillary industries.
Naval Capability Development
Indian Navy to Commission INS Anjadip
The Indian Navy is set to commission INS Anjadip, the third vessel of the eight-ship Anti-Submarine Warfare Shallow Water Craft (ASW-SWC) project, into the Eastern Naval Command in February 2026.
Built by Garden Reach Shipbuilders & Engineers (GRSE), the 77-metre vessel is designed for operations in coastal and shallow waters, where submarine detection and neutralisation are critical.
The ship is equipped with advanced anti-submarine warfare systems including the Hull Mounted Sonar Abhay, lightweight torpedoes, and ASW rockets. Powered by a water-jet propulsion system capable of speeds up to 25 knots, the vessel is designed for rapid response missions including anti-submarine warfare, coastal surveillance, low-intensity maritime operations, and search-and-rescue tasks.
Defence Technology & R&D
DRDO Demonstrates Solid Fuel Ducted Ramjet Technology
India successfully demonstrated Solid Fuel Ducted Ramjet (SFDR) propulsion technology, placing the country among a select group of nations possessing advanced ramjet propulsion capability.
The test validated key subsystems including the nozzle-less booster, ramjet motor, and fuel flow controller, enabling sustained high-speed missile flight. The technology will enable the development of next-generation long-range air-to-air missiles, significantly enhancing India’s air combat capability.
Air Defence Capability
DRDO Successfully Tests Indigenous VSHORADS System
The Defence Research and Development Organisation successfully conducted three successive flight trials of the Very Short-Range Air Defence System (VSHORADS) at the Integrated Test Range, Chandipur.
The tests validated the missile’s ability to intercept high-speed aerial threats across varying speeds, ranges, and altitudes. During the trials, the system successfully intercepted targets simulating enemy aircraft in multiple engagement scenarios.
VSHORADS is an indigenously developed man-portable air defence system designed by Research Centre Imarat in collaboration with other DRDO laboratories and industry partners. The system is intended for deployment across all three armed services, strengthening India’s capability to counter low-flying aircraft, drones, and aerial threats.
Strategic Forces
Agni-3 Ballistic Missile Successfully Test-Fired
India successfully test-fired the Agni-3 intermediate-range ballistic missile from the Integrated Test Range, Chandipur under the aegis of the Strategic Forces Command.
The launch validated all operational and technical parameters, reaffirming the reliability of one of India’s core land-based strategic deterrence systems.
Maritime Security & Defence Diplomacy
Indian Navy Assumes Command of Combined Task Force 154
In a significant milestone for India’s maritime diplomacy, the Indian Navy assumed command of Combined Task Force (CTF) 154, a multinational training task force operating under the Combined Maritime Forces (CMF)headquartered in Bahrain.
The task force focuses on capacity building and training of partner navies, including areas such as maritime domain awareness, maritime interdiction operations, maritime rescue and assistance, leadership development, and law of the sea.
India’s leadership of CTF-154 reflects growing international confidence in its operational expertise and role as a preferred security partner in the Indian Ocean region.
Defence Policy Reform
Draft DAP 2026 Signals Major Procurement Reforms
The Ministry of Defence released the draft Defence Acquisition Procedure (DAP) 2026, proposing significant reforms aimed at accelerating procurement timelines and strengthening domestic defence manufacturing.
Key proposals include raising indigenous content requirements to 60%, introducing technology-readiness-based acquisition, enabling long-term bulk procurement, and refining fast-track procedures for emerging technologies.
The framework also introduces spiral development models for Make and iDEX programmes, along with assured orders for selected developmental projects. The reforms aim to create a more predictable and innovation-driven procurement ecosystem, strengthening India’s defence industrial base.