The Ministry of Defence is examining an industry proposal to incorporate incentives in the forthcoming Defence Acquisition Procedure 2026 to encourage domestic procurement of military‑grade materials, Business Line has reported. 

This initiative aligns with the government’s broader effort to reduce dependence on rare earth imports and strengthen indigenous supply chains. Military‑grade materials encompass a wide range of specialised substances such as chemicals, alloys, high‑grade steel and finished products engineered specifically for defence applications.

These materials are critical across aerospace and defence platforms. Carbon‑fibre composites and advanced titanium or aluminium‑lithium alloys are used in aircraft structures, while amorphous silica felt is employed in missiles, rockets and drones for thermal protection systems.

Naval platforms require resilient chemicals and alloys to withstand corrosion in oceanic environments. The proposal seeks to ensure that such materials are sourced indigenously, thereby enhancing strategic autonomy.

A similar attempt was made during the formulation of DAP 2020, but it did not materialise due to inadequate domestic availability and prohibitive costs, which made imports more practical at the time. 

Since then, DAP 2020 has undergone incremental revisions and is now set to be replaced by the comprehensive DAP 2026, expected to be released within the next 30 to 40 days.

The MoD is currently mapping domestic companies engaged in defence manufacturing and conducting a head count to assess the genuine capabilities of firms dealing in military‑grade materials. Prominent public and private sector companies in this domain include Mishra Dhatu Nigam Ltd (MIDHANI), Kerala Minerals and Metals Ltd (KMML), Saarloha Advanced Materials of the Kalyani Group, PTC Industries, MKU Ltd and SMPP Private Ltd.

Industry stakeholders have proposed monetary incentives for local manufacturing and sourcing of military‑grade materials. Under this framework, bidders procuring indigenously would gain an advantage in becoming L1, the lowest bidder in defence tenders.

Another suggestion is the adoption of the ‘Buyer Nominated Model’, a supply chain strategy where the ultimate buyer or original equipment manufacturer directs contractors to use specific suppliers or materials, rather than allowing subcontractors to select vendors independently.

If accepted, the revised DAP 2026 would include tenders listing domestic companies supplying military‑grade materials.

This would not only strengthen indigenous supply chains but also contribute to defence exports. MIDHANI, for instance, is already integrated into the global aerospace supply chain, demonstrating the potential of Indian firms to compete internationally.

The global aerospace and defence materials market is currently valued between $30.18 billion and $50.19 billion, depending on whether commercial aerospace composites are included. It is projected to expand significantly, reaching up to $86.75 billion by 2033, with a compound annual growth rate exceeding 7 per cent.

India’s push to incentivise indigenous sourcing of military‑grade materials positions its industry to capture a larger share of this growing market, while simultaneously reducing strategic vulnerabilities linked to foreign dependence.

Agencies