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The Defence Acquisition Council has accorded Acceptance of Necessity

ICICIdirect Research 08 Sep 2026 DISCLAIMER

News: The Defence Acquisition Council (DAC) has accorded Acceptance of Necessity (AoN) for defence procurement proposals worth ~₹1.10 lakh crore, with approximately 98% of the procurement to be sourced from Indian industry. For the Indian Army, approvals include CBRN Recce Vehicles, High Mobility Vehicles, Self-Propelled Mechanical Mine Layers, Advanced Light Helicopters (ALHs), Trawl Tanks and Sarvatra Bridge Systems. The Indian Navy received approvals for Arudhra Radars and the design, development and subsequent procurement of Marine Gas Turbines (MGTs), while the IAF received approvals for Ground-Based Multi-Purpose Jammers (GBMPJs) and the Defence Forces Secure Access Card (DEFSAC) system. The approvals are aimed at strengthening indigenous defence capabilities and reducing dependence on foreign suppliers.

View: As the approvals have now been permitted, the tendering and ordering process will start for all these platforms. These approvals strengthen medium-to-long term order visibility for Indian defence manufacturers, with the high domestic sourcing component providing opportunities across platforms, electronics and critical systems. Companies likely to benefit include Hindustan Aeronautics (ALHs), Bharat Electronics (Arudhra radars, CBRN systems electronic systems and GBMPJs), BEML (High Mobility Vehicles, Trawl Tanks and Sarvatra Bridge Systems), Bharat Forge and HAL (Marine Gas Turbines), Astra Microwave and Data Patterns (radar and electronic systems), MIDHANI (specialty materials), and Solar Industries and Premier Explosives (munitions, explosives and propulsion-related applications) while Tech Mahindra is likely to benefit from DEFSAC. Overall, the approvals reinforce the government’s sustained focus on domestic procurement, localisation and indigenous technology development, supporting multi-year growth visibility for the listed defence ecosystem.

Impact: Positive

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