Defence contracts worth thousands of crores inked before fiscal ends

The Defence Ministry on Thursday signed a slew of defence contracts, worth thousands of crores, for multiple big-ticket, indigenous acquisitions for the armed forces in a move that will significantly boost their operational capabilities.

The contracts — a majority of them signed with defence PSUs — were concluded a day before 2022-23 financial year ends, with the government aiming at spending the maximum defence capital acquisition funds and minimise surrender in the backdrop of its inability to process outstanding Rouble payments for weapons purchased from Russia.

The majority of the contracts signed on Thursday was for the Navy. This included those for the acquisition of 11 Next-Generation Offshore Patrol Vessels with Goa Shipyard Ltd (GSL) and Garden Reach Shipbuilders and Engineers (GRSE), Kolkata, at a total cost of Rs 9,781 crore.

According to the ministry, seven ships will be indigenously designed, developed and manufactured by GSL, and four by GRSE. Their deliveries are scheduled to start from September 2026.

A critical acquisition on cards for the Navy — the Fleet Support Ship — could not go through immediately, it was informed. A critical acquisition on cards for the Navy — the Fleet Support Ship — could not go through immediately, it was informed.
Another important acquisition for the Navy was of six Next-Gen Missile Vessels (NGMV). The contract for this was signed with Cochin Shipyard Limited (CSL) at a cost of Rs 9,805 crore. The delivery of the ships, which will undertake maritime strike operations, anti-surface warfare operations, is scheduled to start from March 2027.

A third contract was signed with BrahMos Aerospace Private Limited (BAPL) for procurement of Next-Generation Maritime Mobile Coastal Batteries (long-range) and BrahMos missiles at a cost of more than Rs 1,700 crore. As per the Defence Ministry, these systems will be equipped with supersonic BrahMos missiles and will enhance multi-directional maritime strike capability of the Navy.

Additionally, a contract to procure 13 Lynx-U2 Fire Control Systems for the Navy was also signed with Bharat Electronics Limited (BEL) at a cost of more than Rs 1,700 crore.

On Wednesday, a separate contract with BEL was signed to acquire Sarang Electronic Support Measure (ESM) systems, along with associated engineering support package, at a cost of Rs 412 crore for the Navy. Earlier this month, the CCS had accorded approval to sign a contract with L&T for acquisition of three cadet training ships worth Rs 3,108.09 crore.

A critical acquisition on cards for the Navy — the Fleet Support Ship — could not go through immediately, it was informed.

On Thursday, the ministry also signed contracts with Bharat Dynamics Limited (BDL) and BEL for procurement of improved Akash Weapon System and 12 Weapon Locating Radars, WLR Swathi (Plains) for the Army at an overall cost of over Rs 9,100 crore.

Government officials said although a significant chunk of the capital budget for the forces has been spent, it may not be fully possible to exhaust the entire budget. However, with the volume of indigenous acquisitions taking place this month, it is likely that the government may exceed its target of 68 percent indigenous procurements set for this year.

On Wednesday, a contract worth Rs 1,982 crore was signed with BEL for procurement of Automated Air Defence Control & Reporting System ‘Project Akashteer’ and a separate contract was signed with NSIL, which is under Department of Space, Bengaluru, to procure an advanced Communication Satellite, GSAT 7B at a cost of Rs2,963 crore. Both acquisitions are for the Army.

Last week, the Defence Ministry signed a contract with BEL to procure two Integrated Electronic Warfare Systems ‘Project Himshakti’ at a cost of around Rs 3,000 crore. Additionally, the ministry last week signed two separate contracts with BEL at a cost of over Rs 3,700 crore to procure Medium Power Radars (MPR) ‘Arudhra’ and 129 DR-118 Radar Warning Receivers (RWR) for the IAF.

The IAF also plans to procure high-power radars.

Earlier this month, the ministry had signed a contract with Hindustan Aeronautics Limited (HAL) to procure six Dornier-228 aircraft for the IAF at a cost of Rs 667 crore and the CCS had approved the procurement of 70 HTT-40 Basic Trainer Aircraft from HAL for IAF at a cost of Rs 6,828.36 crore.