Defence Procurement (DAC approvals)
DAC approvals, Buy (Indian-IDDM) and import-ban lists - who wins as India buys its weapons at home
What this is
- An AoN (Acceptance of Necessity) is step one of a 2-4 year process; the contract is the event that moves earnings.
- Buy (Indian-IDDM) rules, import-ban lists and the 75% domestic budget reserve steer that money to Indian makers.
- Electronics (radars, EW), missiles and ammunition convert fastest and repeat most; big platforms are lumpier.
- Valuations already price much of this in - execution (engines, trials, supply chains) is the swing factor.
Why now
- The DAC approved ~₹7.6L Cr of purchases in four 2026 meetings (Feb, Mar, Jul, Sep) - a record pipeline.
- About 98% of the ₹1.10L Cr cleared on 7 Sep 2026 is to come from Indian industry.
- FY27 budget: ₹1.85L Cr for capital acquisition, 75% (₹1.39L Cr) reserved for domestic industry.
- But approvals are not orders: FY26 saw ₹6.81L Cr of approvals and ₹2.28L Cr of contracts.
What to watch
- DAC meeting outcomes (PIB): AoN value, items, Indian-industry share
- Contracts actually signed by MoD vs AoNs accorded (quarterly and full-year)
- Cabinet Committee on Security approvals for the big tickets (QRSAM, P75I, MRFA)
- Company order inflow vs guidance (BEL, HAL, BDL, Solar, Bharat Forge)
- Positive Indigenisation List notifications and DAP 2026 final notification
- Capital-budget utilisation (MoD) and defence export data
Major areas
The map groups the anatomy into these areas before you drop into individual components.
Missiles, drones & ammunition
Guided missiles, air defence, drones and the shells, rockets and explosives they fire - the fastest-converting, most repeatable orders after Operation Sindoor.
Land systems
Artillery, armoured and logistics vehicles and bridging - big Army programmes where private industry (Bharat Forge, L&T, Tata) now competes with DPSUs.
Aircraft & warships
Fighters, helicopters, transports, frigates and submarines - the largest single approvals, the longest gaps between approval and delivery.
Defence electronics
Radars, electronic warfare, avionics, communications and electro-optics - a rising share of every platform's value, and the most indigenised slice.
Parts & special materials
Superalloys, titanium, forgings, castings and precision engine parts that every platform and shell needs - where import-ban lists push work to Indian suppliers.
Platform primes
The companies that deliver whole aircraft and helicopters to the forces. A DAC approval for fighters or helicopters ends up as their order book - and their delivery pace (often set by imported engines) decides when it becomes revenue.
Hindustan Aeronautics
ListedIndia's main aircraft and helicopter maker and the default production agency for DAC-approved aircraft (Tejas, Su-30, ALH, Prachand)
Tata Advanced Systems
UnlistedTata group's defence arm: C-295 aircraft final assembly, ATAGS guns (with Bharat Forge), wheeled armoured platforms
Potential bottlenecks
- Very long trials (multiple seasons, desert and high altitude)Artillery & armoured systems
- Engines, transmissions and some fire-control parts importedArtillery & armoured systems
- Approval steps after trials (e.g. ATAGS conversion approvals) delay revenueArtillery & armoured systems
- Seekers, some propellant chemicals and electronics are still importedMissiles & air defence
- Long user trials before bulk orders; CCS approval needed for the largest dealsMissiles & air defence
- Production ramp-up limited by sub-system suppliers (BDL cited supply-chain issues in FY26)Missiles & air defence
- Imported engines, gearboxes and many weapons/sensorsWarships & submarines
- Long build times; first P75(I) boat ~7 years after signing (reported)Warships & submarines
- Yard capacity and skilled labourWarships & submarines
- Motors, batteries, cameras and chips still lean on imports; 'no Chinese parts' checks raise costsDrones & counter-drone
- Fast technology change - designs age in 2-3 yearsDrones & counter-drone
- Trials in electronic-warfare conditions knock out many biddersDrones & counter-drone
- Imported engines: GE delivered only 6 F404 engines to HAL in FY26 vs. 11 promisedFighters & helicopters
- Airframes waiting for engines (27 Tejas Mk1A airframes reported ready)Fighters & helicopters
- Price settlement on some deliveries still pendingFighters & helicopters
- Imported chassis or drivetrains on some specialist vehiclesMilitary vehicles & bridging
- Long trials for armoured and specialist variantsMilitary vehicles & bridging
- Low-margin competitive bidding on trucksMilitary vehicles & bridging
- Qualification takes years (one part can need 2-3 years of approvals)Engines, aerostructures & precision parts
- Titanium and superalloy supplyEngines, aerostructures & precision parts
- Engine core technology still licensed from abroadEngines, aerostructures & precision parts
- Gallium-nitride chips and some RF parts importedRadars & electronic warfare
- Long qualification on platformsRadars & electronic warfare
- Skilled RF engineersRadars & electronic warfare
- Imported chips and sensorsAvionics, comms & electro-optics
- Small order sizes and slow payment cyclesAvionics, comms & electro-optics
- Qualification on each new platformAvionics, comms & electro-optics
- Nitrocellulose, TNT and other inputs in tight global supplyAmmunition, rockets & explosives
- Safety licences and land for new plantsAmmunition, rockets & explosives
- Testing ranges and proof firing capacityAmmunition, rockets & explosives
- Raw material (titanium sponge, nickel) importsSpecial alloys, forgings & castings
- Years-long qualificationSpecial alloys, forgings & castings
- Capital-heavy melting capacitySpecial alloys, forgings & castings
Companies in this theme
25 companies, 22 listed. The 2 platform primes are listed above.
Bharat Electronics
ListedMain production agency for radars, EW, air-defence systems (Akash, QRSAM) and military communications
Company page →Bharat Dynamics
ListedGovernment-owned missile maker - Akash, Astra, anti-tank missiles, MRSAM and torpedoes
Company page →Mazagon Dock Shipbuilders
ListedBuilds destroyers and submarines; preferred yard for the P75(I) submarine programme with Germany's TKMS
Company page →Garden Reach Shipbuilders & Engineers
ListedKolkata yard building frigates (P17A), anti-submarine shallow-water craft and export vessels
Company page →Cochin Shipyard
ListedBuilt INS Vikrant; builds anti-submarine craft and runs India's largest ship-repair business
Company page →Larsen & Toubro
ListedLargest private defence prime: K9 Vajra guns, warships, Sarvatra bridging sub-systems and missile/aerospace parts
BEML
ListedState-controlled maker of Army trucks, recovery vehicles and the Sarvatra mobile bridge; also mining and rail
Company page →Bharat Forge
ListedPrivate artillery, armoured vehicle and ammunition maker through Kalyani Strategic Systems (KSSL)
Solar Industries India
ListedLargest private explosives maker - Pinaka rockets, ammunition, loitering munitions and missile propellants
Premier Explosives
ListedSmall maker of propellants, explosives and pyrotechnic devices for missiles, rockets and chaff/flares
Company page →Data Patterns (India)
ListedDesign-led defence electronics: radars, EW, avionics and processors sold to BEL, HAL and DRDO
Astra Microwave Products
ListedRF and microwave sub-systems for radars, EW and missiles; partner on the Uttam fighter radar
Company page →Apollo Micro Systems
ListedEmbedded electronics for missiles, torpedoes and drones; moving up to sub-system integration
Paras Defence and Space Technologies
ListedDefence optics (thermal imagers, sights, space optics), anti-drone systems and electronics
Avantel
ListedSoftware-defined radios and satellite-communication terminals for the Navy and other forces
Company page →Zen Technologies
ListedCombat training simulators and counter-drone systems for all three services
Company page →ideaForge Technology
ListedSurveillance drones (SWITCH, ZOLT) for the Army and paramilitary
Company page →Mishra Dhatu Nigam (MIDHANI)
ListedGovernment-owned maker of superalloys, titanium alloys and armour for aero engines, missiles and space
Company page →PTC Industries
ListedTitanium and superalloy castings and forgings for aero engines, missiles and artillery
Azad Engineering
ListedPrecision turbine and aero-engine parts for global engine makers and Indian defence programmes
Company page →Ashok Leyland
ListedTruck maker that supplies the Army's logistics trucks and specialist vehicle chassis
Company page →Advanced Weapons & Equipment India
UnlistedGovernment-owned gun and small-arms maker formed from the ordnance factories (Dhanush artillery)
Munitions India
UnlistedGovernment-owned ammunition maker (former ordnance factories) - largest producer of shells, rockets and explosives
Common questions
Which listed companies are in India's Defence Procurement (DAC approvals) supply chain?
NextResearch maps 22 listed companies across 11 layers of the Defence Procurement (DAC approvals) supply chain. The largest with high exposure, by market cap as of 30 Oct 2026: Larsen & Toubro (₹5.32L Cr); Hindustan Aeronautics (₹3.25L Cr); Bharat Electronics (₹2.69L Cr); Solar Industries India (₹1.70L Cr); and Bharat Forge (₹84,230 Cr).
What are the layers of the Defence Procurement (DAC approvals) supply chain?
11 layers: Artillery & armoured systems; Missiles & air defence; Warships & submarines; Drones & counter-drone; Fighters & helicopters; Military vehicles & bridging; Engines, aerostructures & precision parts; Radars & electronic warfare; Avionics, comms & electro-optics; Ammunition, rockets & explosives; and Special alloys, forgings & castings.
Who are the end players in Defence Procurement (DAC approvals)?
In the Fighters & helicopters layer: Hindustan Aeronautics and Tata Advanced Systems (not NSE-listed).
What are the bottlenecks in India's Defence Procurement (DAC approvals) supply chain?
Artillery & armoured systems: Very long trials (multiple seasons, desert and high altitude). Missiles & air defence: Seekers, some propellant chemicals and electronics are still imported. Warships & submarines: Imported engines, gearboxes and many weapons/sensors. Drones & counter-drone: Motors, batteries, cameras and chips still lean on imports; 'no Chinese parts' checks raise costs. More by layer on this page.