In 2026, India’s defence budget crossed USD 85.6 billion, more than double of what it was a decade ago. One might reasonably expect such a substantial and sustained fiscal commitment to translate into a demonstrably more capable and self-reliant military. However, the truth on-ground is, it has not. India’s defence procurement crisis is not, and has never been, a problem of insufficient funding. It is a problem of institutional design, political economy, and governance failure, one that has been obscured for decades by a cycle of policy revision, nationalist rhetoric, and selective contracting that serves interests other than national security.
The scale of the dysfunction becomes apparent when procurement timelines are examined against budgetary growth. While defence expenditure rose by approximately 175% between 2014–15 and 2026–27, acquisition timelines have continued to extend well beyond seven years for many programmes. Compounding this is the recurring phenomenon of fund surrenders, unspent allocations returned at the close of fiscal cycles, which signals not prudent financial management but rather an entrenched incapacity to translate budgetary resources into operational outcomes. A system that cannot spend what it is given is not constrained by scarcity; it is constrained by structure.
That structure has been formally acknowledged as problematic since at least the aftermath of the 1999 Kargil conflict, which exposed critical gaps in India’s military readiness and catalysed the establishment of the Defence Acquisition Council and the Defence Procurement Board in 2002. These institutions were accompanied by the first of what would become nine successive iterations of procurement procedure, from the Defence Procurement Procedure of 2002 through to the Defence Acquisition Procedure of 2020. Each iteration was presented as corrective; none proved transformative. The DPP-2002 codified capital procurement steps but did not reduce cycle time. The DPP-2003 introduced Buy-and-Make provisions premised on technology transfer, yet absorption of transferred technology remained shallow and dependency on foreign supply chains persisted. Subsequent revisions in 2005, 2006, and 2008 layered additional complexity onto an already labyrinthine process, conflating probity with paralysis. By 2016, analysts were widely characterising the procurement framework as sprawling and counterproductive, offering the appearance of reform without its substance.
The most recent iteration, the DAP-2020, introduced under the rubric of Atmanirbhar Bharat (self-reliant India) mandated a minimum indigenous content threshold of fifty percent for new acquisitions. The normative ambition was significant. The practical outcome has been less impressive. A performance audit conducted by the Comptroller and Auditor General revealed that approximately 72% of emergency procurement cases experienced delays, with nearly thirty percent of deliveries failing to meet stipulated timelines. These are not anomalies in an otherwise functioning system, rather they are symptomatic of weak enforcement, poor contractual oversight, and procedural compliance that substitutes form for outcome. The proposed DAP 2026, which reportedly envisions a “Speed Doctrine” aimed at compressing acquisition timelines to two years, constitutes an implicit institutional admission that the preceding twenty-four years of procedural reform failed to resolve the foundational problem.
Nowhere is the gap between political messaging and industrial reality more apparent than in India’s indigenisation agenda itself. The Tejas Mk1A light combat aircraft, the flagship of India’s indigenous aerospace programme, continues to rely on the General Electric F404 engine, a US-based company’s propulsion system for which no domestic alternative exists at operational maturity. Meanwhile, India concluded the Multi-Role Fighter Aircraft agreement for Rafale jets, reportedly valued at USD 39.6 billion, even as the indigenisation narrative remained politically prominent. Critical operational deficiencies also persist in adjacent domains: India’s aerial refuelling capacity, dependent on six Ilyushin IL-78 tankers procured in 2004, remains structurally inadequate for the operational demands of a two-front contingency environment. These are not incidental shortfalls. They reflect a sustained failure to translate procurement policy into genuine capability development.
The institutional trajectory of programmes like the Advanced Medium Combat Aircraft further illustrates this dynamic. The decision to reduce Hindustan Aeronautics Limited’s role in the AMCA programme, in favour of greater private sector participation, represents a structural shift in India’s defence industrial model. While private sector involvement is not inherently problematic, and may, in principle, introduce efficiency gains, the pattern of resource concentration that has emerged raises legitimate concerns. Defence procurement pipelines have become increasingly dominated by a small number of large conglomerates with the institutional access, political relationships, and financial capacity to navigate the procurement bureaucracy. The result is not a competitive industrial ecosystem but an oligopolistic one, in which the concentration of contracts amplifies the risks of policy capture and misallocation of public resources.
This dynamic, variously characterised as crony capitalism in public discourse, has structural consequences beyond the ethical ones. When procurement decisions reflect the gravitational pull of concentrated industrial interests rather than a coherent assessment of capability requirements, the outcome is often a force structure defined by availability rather than necessity. India’s reliance on stopgap acquisitions across multiple foreign platforms has produced precisely a fragmented inventory of systems with divergent maintenance requirements, incompatible logistics chains, and differentiated training burdens. Interim solutions, procured under emergency authorities to address urgent shortfalls, have calcified into permanent fixtures, compounding the operational inefficiencies they were designed to temporarily mitigate.
The aggregate effect of these interlocking failures namely procedural complexity, weak institutional enforcement, mere rhetorical indigenisation, and industrial concentration constitutes what may be described as a condition of “defence industry paralysis”. It is a condition in which large budgets, ambitious policy frameworks, and earnest political commitment coexist with persistent capability gaps, delayed acquisitions, and an armed forces that remains dependent on ageing platforms and foreign supply chains for critical functions. The system is not broken for lack of attention; it has received sustained attention for more than two decades. It is broken because the institutional incentives that govern its operation reward process over performance and narrative over capability.
Addressing this paralysis will require more than another procedural revision or a new indigenisation target. It will demand a fundamental rethinking of the governance framework that administers defence procurement, one that separates institutional responsibility from political convenience and establishes meaningful accountability for programme delays. It will also have to create conditions for genuine industrial competition rather than the managed distribution of large contracts among preferred partners. Until India’s defence establishment is designed to serve the operational requirements of the armed forces rather than the political and commercial interests that have colonised its processes, no volume of budgetary allocation will translate into the military readiness that the country’s strategic environment demands. The squadrons will remain empty, and the accounts will remain full.
Author: Maheen Butt is working as a Content Writer with over 5 years of experience in the industry, having a particular interest in geopolitics and security studies.
