Defence Dispatch - February 2026

In this edition of Defence Dispatch, we look back at a month marked by a new draft defence procurement framework and two high-level diplomatic visits - President Emmanuel Macron’s visit to India and Prime Minister Narendra Modi’s visit to Israel, both of which were accompanied by defence-related agreements and announcements. Taken together, these developments offer a useful window into the direction of India’s defence industrial policy and the evolving shape of its external partnerships. 

In-Focus:  

On 10 February, the Ministry of Defence released the draft Defence Acquisition Procedure 2026 for stakeholder comments. The document, running to two volumes and roughly 800 pages, is set to replace the DAP 2020 and take effect from 1 April 2026. Comments are invited on the draft until 3 March. 

The DAP 2020 was organised around Atmanirbhar Bharat - domestic manufacturing, import substitution, and building an Indian industrial base through licensed production and technology transfer. DAP 2026 advances a slightly different argument: that manufacturing inside India is not the same as owning what is manufactured. The new framework reframes the objective to "Owned by India," centred on the retention of intellectual property, source codes, and design authority within Indian entities. To qualify as indigenously designed under the new standard, a vendor must own not just the compiled system but the underlying source code, design data, and the right to modify and upgrade without encumbrance or dependence on the original manufacturer. Design licensing arrangements from foreign OEMs explicitly do not qualify under this. 

Several procedural changes follow from this philosophy. The Buy (Indian) category which allowed procurement from domestic vendors without a requirement that the design itself be Indian has been removed. The minimum indigenous content threshold under the preferred Buy (Indian-IDDM) route has been raised from 50 to 60 percent, with a price credit of up to 15 percent for higher localisation. Indigenous content thresholds have also been raised across other procurement categories: the manufacturing portion of both the Buy (Indian) and Manufacture in India and Buy (Global) and Manufacture in India routes now requires at least 60 percent IC, up from 50 percent earlier, while even the Buy (Global) category incorporates an IC requirement of up to 30 percent. Rather than relying on offset obligations after procurement, long criticised for delivering little meaningful technology transfer, the framework seeks to build localisation and technology access directly into the procurement structure itself. Wholly owned Indian subsidiaries of foreign defence firms will continue to not qualify as Indian vendors under key procurement categories - a decision that reflects sustained pressure from domestic industry, which had argued that treating such entities as Indian vendors would effectively allow foreign OEMs to crowd out genuine indigenous players. 

The draft also introduces a Low-Cost Capital Acquisition pathway for projects up to ₹75 crore, enabling limited procurement of certain advanced equipment for testing and evaluation with simplified procedures, before proceeding with larger-scale procurement. It also elevates iDEX - the Ministry of Defence’s flagship innovation programme for developing and scaling defence technologies through start-ups, MSMEs, and other non-traditional suppliers, from a parallel innovation track to a mainstream acquisition pathway with mandatory minimum purchase obligations following successful trials. 

DAP 2026 places greater emphasis on systems being ‘Owned by India’, including access to design authority, source code and the legal right to modify platforms without foreign permission. This policy direction is indicative of how India is approaching negotiations for major global defence acquisitions, a dynamic that also surfaced in the recent India-France defence discussions during President Macron's visit. 

France - India Special Global Strategic Partnership 

During President Macron’s recent visit to India, the two countries elevated ties to a Special Global Strategic Partnership and signed 21 agreements spanning defence, artificial intelligence, energy, and critical technology. 

Days before Macron's arrival, India's Defence Acquisition Council had approved the Acceptance of Necessity for 114 Rafale jets under the Multi-Role Fighter Aircraft programme - a deal estimated at $40 billion that would be the largest aviation procurement in Indian history.  

Reports around the negotiations drew attention to the scope of technology access. While the source code for key systems, including the SPECTRA electronic warfare suite and Thales radar, are reportedly not being transferred, India may receive API-level access enabling integration of indigenous weapons and sensors through defined software interfaces. Such restrictions are common: the UAE reportedly received the same terms for its Rafale fleet, and even close defence allies of the United States did not receive core source code for systems such as the F-35. For a deal of this scale, API-level access would still represent a meaningful step forward in integration flexibility.  

Russia by contrast reportedly offered full source code access for the Su-57E as part of its pitch to India last year. However, this offer followed years of disagreements over technology transfer and costs, which had resulted in India pulling out of the joint fighter jet development program in 2018. More broadly, India's procurement strategy increasingly reflects an effort to avoid dependence on any single partner and instead cultivate a a diversified base of defence technology relationships – an approach that the structure of this deal, and the wider Macron visit, appears to reinforce. 

The visit also covered ground beyond the immediate procurement agenda. France reiterated its support for India's permanent membership of a reformed UN Security Council, and the two sides agreed to deepen cooperation in critical minerals, covering exploration, extraction, processing and supply chain resilience - an area of growing strategic importance as advanced defence manufacturing becomes increasingly dependent on rare earth inputs. A DRDO-DGA Technical Arrangement covering defence space was confirmed, and a joint venture with Bharat Electronics Limited for domestic production of HAMMER missiles formalised. India now accounts for roughly 30 to 33 percent of French arms exports by value, making it France's largest single defence customer. For India, France remains an important defence partner willing to structure cooperation around co-production, technology transfer, and long-horizon industrial collaboration rather than platform sales alone. The terms on which the two countries are engaging have changed materially, and the February visit made that structural shift difficult to overlook. 

PM Modi's State Visit to Israel 

The emphasis on technology transfer and industrial collaboration was also visible during Prime Minister Modi’s visit to Israel on 25-26 February, where India and Israel further elevated their strategic partnership and signed 17 agreements spanning defence, cybersecurity and artificial intelligence.  

The discussions around defence, focussed on technology transfer, and reportedly covered Israeli air defence architecture including Iron Dome, David's Sling, and the Iron Beam directed-energy system for potential integration into India's planned "Sudarshan Chakra" multi-layered missile shield, with technology transfer under Make in India as the stated objective. Israeli Ambassador Reuven Azar, speaking ahead of the visit, pointed specifically to missile defence and AI-drone integration as areas of industrial co-operation the visit would address, describing the agreement as one that would involve "more sensitive technologies" than the two sides had previously shared. A Letter of Intent was also signed to establish an India-Israel Centre of Excellence in Cybersecurity in India. 

Defence Roundup:  

Defence Time Machine:  

Research into bio-hybrid insects - living organisms integrated with electronic control systems has existed for nearly two decades. Early work funded by the U.S. Defense Advanced Research Projects Agency and several university laboratories demonstrated remotely controlled beetles and cockroaches capable of carrying sensors and transmitting data for surveillance or search-and-rescue missions. The concept centers on exploiting biological locomotion rather than engineered mobility. Insects can navigate rubble, tunnels and confined environments with low acoustic or visual signature, offering capabilities that conventional micro-drones may struggle to replicate. 

A German defence startup SWARM Biotactics recently announced that it had field-tested programmable cyborg cockroach swarms within EU environments, including the German military. The system uses Madagascar hissing cockroaches fitted with miniature electronic “backpacks” carrying sensors, edge AI processing and secure communications. Movement is guided through low-voltage neural interfaces, while swarm autonomy software allows multiple units to operate as a coordinated reconnaissance system. Unlike traditional drones, these platforms scale through breeding, not factories, suggesting a new category of military robotics where intelligence gathering is embedded in living organisms controlled by humans, rather than engineered airframes.  

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