The next major defence spending cycle in India is strongly moving beyond fighter jets, warships and tanks. Jammers, radars, anti-drone systems, electronic warfare equipment and surveillance platforms are emerging as key priorities in the country’s military modernisation push.

The shift is seen in the government’s recent procurement approvals as well as the latest assessment by Antique Stock Broking. In its August report, “India Defence Sector: Ordering to Gain Momentum,” the brokerage firm said air defence is emerging as a new frontier for defence spending, with procurement increasingly focused on electronic warfare, counter-drone capabilities, precision strike weapons and advanced surveillance following Operation Sindoor.

This indication came on July 3, when the Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, approved capital acquisition proposals worth Rs 52,000 crore. Several approved programmes aim at strengthening India’s air-defence and electronic warfare capabilities, according to the Ministry of Defence.

India’s defence spending enters an ‘invisible’ battlefield

Traditionally, India’s major defence acquisition programmes have centred on platforms such as fighter aircraft, submarines, tanks and artillery. These programmes will continue to form a substantial part of the procurement pipeline.

According to Antique, the brokerage firm expects marquee programmes such as the Rs 90,000 crore P-75I submarine programme, Rs 30,000 crore Quick Reaction Surface-to-Air Missile (QRSAM) programme and Rs 33,000 crore Next Generation Corvette programme to drive a significant part of upcoming defence orders. At the same time, the composition of procurement is changing.

The brokerage said recent acquisition proposals favour technologies that operate across the electromagnetic spectrum – from systems designed to detect and counter hostile drones to equipment that protects communication networks, strengthens layered air defence and expands battlefield surveillance.

This represents a shift towards a more networked form of warfare, where sensors, electronic systems and command networks increasingly determine how effectively traditional platforms can operate.

Why the Rs 52,000 crore July approvals matter

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The July DAC approvals provide a significant indication of this changing procurement priority. According to the Ministry of Defence, the Army’s approved acquisition package included the AKASH TARANG Anti-UAV Electronic Warfare System, Medium Range Surface-to-Air Missile (MRSAM) systems, Very Short Range Air Defence System (V-SHORADS), Jet-Based Kamikaze Drone System and an Active Protection System for tanks.

The ministry said AKASH TARANG is intended to provide protection against hostile drones, while the Jet-Based Kamikaze Drone System is expected to strengthen electronic warfare capabilities while enhancing battlefield lethality and survivability.

The combination of these systems is significant because it brings together several elements of modern warfare: drone detection and countermeasures, air defence, electronic warfare and protection of frontline platforms.

Rather than being isolated acquisitions, the approvals indicate that electronic warfare and counter-drone systems are becoming recurring components of India’s wider defence modernisation programme.

Air defence emerges as the new frontier

Antique said the shift has accelerated following Operation Sindoor, with the government’s procurement priorities increasingly focused on systems such as V-SHORADS, MR-SAM, AKASH TARANG, Jet-Based Kamikaze Drone Systems and Fixed-Wing High Altitude Pseudo Satellites (FW-HAPS). Together, these programmes cover a wide spectrum of capabilities – from short- and medium-range air defence and counter-drone warfare to precision strike and high-altitude surveillance.

The growing importance of these systems also means that future defence spending is likely to have a greater electronics component.

Unlike conventional platforms, electronic warfare and air-defence systems depend heavily on radars, sensors, communications, software, command systems and electronic countermeasures. This could expand the opportunity for India’s defence electronics and systems manufacturers alongside traditional platform makers.

Surveillance joins the same defence ecosystem

The shift is not limited to the Army. The Ministry of Defence said the DAC also approved the procurement of Fixed-Wing High Altitude Pseudo Satellites (FW-HAPS) for the Indian Air Force. These platforms are intended to provide persistent intelligence, surveillance and reconnaissance while also supporting telecommunications and remote-sensing functions.

For the Navy, the DAC approved the Naval Shipborne Unmanned Aerial System (NSUAS) to strengthen maritime surveillance and situational awareness.

The two programmes point to a broader surveillance architecture in which unmanned platforms and high-altitude systems complement conventional aircraft and naval assets. The result is a defence ecosystem increasingly built around the ability to detect, track, communicate, jam and respond – rather than simply deploying a larger number of conventional platforms.

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Project Kusha could create a longer-term opportunity

Another programme highlighted by Antique is Project Kusha, officially known as the Extended Range Air Defence System (ERADS), which DRDO is developing as an indigenous alternative to Russia’s S-400 Triumf air-defence system.

While the programme remains under development, Antique views it as another indication that air-defence systems and associated electronics could become a long-duration investment theme for India’s defence industry.

The development of indigenous long-range air-defence capabilities would also deepen India’s domestic ecosystem for radars, missiles, command-and-control systems and other supporting technologies.

BEL, BDL among companies positioned to benefit

The changing procurement mix could create opportunities for companies beyond traditional defence platform manufacturers. The brokerage firm expects Bharat Electronics Ltd (BEL) to benefit from the expanding electronics opportunity. It has also highlighted BEL’s potential involvement in Combat Management Systems linked to major naval programmes as well as broader electronics requirements arising from India’s defence modernisation.

Bharat Dynamics Ltd (BDL) could also benefit from the missile component of the new procurement cycle. The brokerage estimates that BDL could receive missile-supply opportunities worth around Rs 10,000-12,000 crore linked to the QRSAM programme.

This suggests that the impact of the air-defence push could extend across the defence supply chain – from missile manufacturers to radar and electronics companies and suppliers of sensors, communications and electronic warfare equipment.

(This article discusses sector-wide growth trends, government defence procurement approvals, and prospective order pipeline projections for listed defence companies (BEL and BDL) based on research from Antique Stock Broking. While it highlights macro opportunities across electronic warfare and air defence systems, the forward-looking expectations and order values are based on brokerage research and do not constitute direct stock recommendations or personal investment advice. Readers should evaluate their financial goals and consult a SEBI-registered investment advisor before making investment decisions based on prospective defence order estimates.)