INDIA Trends and Developments Contributed by: Uday S. Ahlawat, Gaurav Bhalla and Shramona Sarkar, Ahlawat & Associates
ments, public-law considerations, and the limits on execution against government assets. In defence matters, parties should therefore consider dispute resolution at the drafting stage rather than relying solely on litigation after a dispute has arisen. Outlook for the Indian defence sector India’s defence sector has witnessed a significant expansion of private-sector participation in recent years. The government has progressively opened up greater space for private manufacturers, start- ups, and technology companies through reforms to defence procurement, foreign investment and industrial licensing. This has been accompanied by a stronger policy emphasis on indigenous design, domestic manufacturing, and increasing the partici - pation of Indian industry in defence production. A related development has been the increasing focus on defence exports. India has sought to expand its position as a defence manufacturing and export base, with Indian companies increasingly supplying equip - ment and components to foreign customers. The government has also taken steps to streamline export authorisations and promote defence exports through dedicated policy measures.
On the regulatory side, the Draft DAP 2026 represents the next significant stage in the reform of the defence acquisition framework. The draft proposes changes aimed at simplifying procurement, encouraging indig - enous design and development, and increasing the participation of Indian industry. Its final form and implementation will therefore be an important devel - opment for companies participating or intending to participate in defence procurement. The defence sector in India is also seeing continued rationalisation of the licensing framework and greater use of online processes for defence-related approv - als. At the same time, regulatory scrutiny remains sig - nificant, particularly in relation to foreign investment, security clearances, ownership and control, technol - ogy transfer, and exports. The overall direction of the sector is therefore towards greater private and foreign participation, but within a framework that continues to retain substantial government oversight over strategi - cally sensitive activities.
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