IAF's ₹3.6 Lakh Crore Modernisation Drive: Rafales, Transports, And Surveillance Assets On Horizon for FY26-27

Ministry of Defence has outlined ambitious procurement plans for the Indian Air Force (IAF) in the financial year 2026-27, aiming to bolster its combat capabilities amid escalating geopolitical tensions, reported Hindustan Times.
These plans include major contracts for 114 Rafale fighter jets, up to 60 medium transport aircraft (MTA), and additional airborne early warning and control (AEW&C) systems, as revealed in a response to a parliamentary standing committee on defence.
The Defence Acquisition Council (DAC), the apex body for military procurement, cleared acquisitions worth ₹3.6 lakh crore in February, with the 114 Rafale jets under the Multi-Role Fighter Aircraft (MRFA) program forming a cornerstone. This Acceptance of Necessity (AoN) marks the initial step, paving the way for tendering, technical evaluations, cost negotiations, and eventual approval by the Cabinet Committee on Security.
The Rafale deal is projected to cost approximately ₹3.25 lakh crore, reflecting the scale of investment required to modernise the IAF's fleet. Under the proposed MRFA model, French manufacturer Dassault Aviation will produce the jets in India alongside a local partner, aligning with the 'Make in India' initiative. France is set to deliver 18 jets in fly-away condition, while the remaining 96 will be manufactured domestically.
Negotiations with France emphasise high localisation of production, integration of indigenous weapons, and customisation for India-specific operational needs. This approach not only enhances self-reliance but also builds long-term manufacturing expertise within the country.
Complementing the fighters, the IAF's capital budget for 2026-27 has surged by 37.03% compared to the previous year's estimates. These funds will support key new schemes, including the MRFA, combat enablers like AEW&C and TEJAS MK-1A, the MTA program, and medium-altitude long-endurance remotely piloted aircraft (RPA), alongside ongoing commitments.
The parliamentary committee urged the IAF to maximise these allocations for modernisation, particularly in armaments and vital platforms, given the pressing geopolitical scenario. This includes addressing squadron shortages and enhancing technological superiority.
The MTA program targets 60 new transport aircraft to strengthen airlift capabilities, critical for rapid troop deployment and logistics in diverse terrains. The DAC is expected to grant approval imminently, followed by a competitive tender process.
Bidders include Lockheed Martin with its C-130J Super Hercules (20-ton payload), Embraer's KC-390 Millennium (26 tons), and Airbus Defence and Space's A-400M (37 tons). Each contender aligns with 'Make in India' by committing to local production lines.
Lockheed Martin has partnered with TATA Advanced Systems Limited (TASL), while Embraer has allied with Mahindra. Airbus has yet to announce its Indian collaborator, but the contest promises significant technology transfer and job creation.
Additional AEW&C systems will enhance situational awareness, enabling better command and control in contested airspace. These procurements collectively aim to reverse the IAF's squadron depletion and counter regional threats.
The ministry's disclosures to the committee, detailed in a report tabled in the Lok Sabha last week, underscore a strategic pivot towards indigenous manufacturing and rapid capability induction. Successful execution could position the IAF as one of the world's most potent air forces by the decade's end.
HT
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