India clears defence purchase worth $6.5 billion (Rs 54,000 crore): New Delhi, March 20, 2025 – In a significant move aimed at enhancing the nation’s defense capabilities, India’s Defence Acquisition Council (DAC), chaired by Raksha Mantri Shri Rajnath Singh, has granted Acceptance of Necessity (AoNs) to eight capital acquisition proposals totaling over Rs 54,000 crore (approximately $6.5 billion USD). The approvals, announced on March 20, 2025, signal a major push towards modernizing the Indian armed forces and streamlining the procurement process.
The key approvals include critical upgrades for the Indian Army, Navy, and Air Force, reflecting a comprehensive approach to strengthening all branches of the military.
Indian Army’s T-90 Tank Upgrade
The Indian Army received a crucial boost with the DAC’s approval for the procurement of 1350 HP engines to replace the existing 1000 HP engines in its T-90 Bhishma tanks. This upgrade is particularly significant for enhancing the tanks’ battlefield mobility in high-altitude areas, where the increased power-to-weight ratio will provide a decisive advantage. The challenging terrain along India’s northern borders necessitates such enhancements, ensuring the T-90s remain a formidable force in any operational environment.
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T-90 MBT.
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Navy’s Varunastra Torpedo Enhancement
The Indian Navy’s anti-submarine warfare capabilities will be significantly strengthened with the approval for the procurement of additional Varunastra Torpedoes (Combat). This indigenously developed ship-launched anti-submarine torpedo, designed by the Naval Science & Technological Laboratory, will provide a potent deterrent against adversary submarine threats. The induction of these advanced torpedoes underscores India’s commitment to self-reliance in defense technology and its focus on maintaining a strong maritime presence.
Air Force’s AEW&C Systems Acquisition
The Indian Air Force received a major capability boost with the approval for the procurement of Airborne Early Warning & Control (AEW&C) Aircraft Systems. These systems, recognized as force multipliers, will revolutionize the IAF’s operational capabilities by providing enhanced situational awareness and significantly increasing the combat potential of other weapon systems. The ability to detect and track threats at extended ranges will provide a crucial strategic advantage in modern warfare.
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IAF’s AWACS Aircraft.
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Streamlining the Acquisition Process
In addition to the major procurement approvals, the DAC also approved new guidelines aimed at reducing timelines in the capital acquisition process. This initiative, part of the “Year of Reforms” in the Ministry of Defence, seeks to make the procurement process faster, more effective, and efficient. By streamlining procedures and eliminating bureaucratic bottlenecks, the Ministry aims to ensure that the armed forces receive the necessary equipment in a timely manner.
Economic Impact and Strategic Significance
The significant investment of Rs 54,000 crore (approximately $6.5 billion USD) will not only bolster India’s defense capabilities but also stimulate the domestic defense industry. The emphasis on indigenous development, as seen with the Varunastra torpedo, aligns with the government’s “Make in India” initiative, promoting self-reliance and technological advancement.
The DAC’s decisions reflect a strategic approach to addressing the evolving security challenges facing India. By modernizing its armed forces and streamlining its procurement processes, India is reinforcing its commitment to maintaining peace and stability in the region.
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Note: 1 USD = 83 INR.
