NEW DELHI: India is likely to award several major contracts in the financial year 2026-27 to enhance the air force’s combat superiority, including contracts for the procurement of 114 Rafale fighter jets, up to 60 medium transport aircraft (MTA) and additional airborne early warning and control (AEW&C) systems, the defense ministry told a parliamentary committee.
“There is an increase of 37.03% in the capital budget of the Indian Air Force as compared to the budget estimates for 2025-26. The allocated funds are to be used against some new major schemes like MRFA [a reference to the Rafale purchase]combat enablers (AEW&C, LCA Mk-1A), MTA, and medium-altitude long-endurance RPA [remotely piloted aircraft]“In addition to the ongoing commitments made,” the ministry told the Parliamentary Standing Committee on Defence, which submitted its latest report in the Lok Sabha last week.
The Ministry responded to the Committee’s questions about the priority areas identified for capacity development, given the increase in the Air Force’s capital share in the period 2026-2027.
In February, the Defense Acquisition Council (DAC), India’s apex military procurement body, approved the purchase of military equipment worth $3.6 lakh crore, including 114 Rafale aircraft under the MRFA (Multi-Role Fighter Aircraft) programme. The Council’s acceptance of the necessity (AoN) for new combatants was the first step in the procurement process.
The cost of enhancing Rafale’s capability is expected to be approx $3.25 million crores. The next steps before an actual deal is reached include bidding, technical discussions, cost negotiations and final approval from the Ministerial Committee for Security.
“Keeping in view the modernization of the Armed Forces, especially during the current geopolitical scenario, the Committee urges the Air Force to profitably utilize funds allocated for modernization and technological modernization in armament and in the procurement of other vital platforms,” the committee said in its report.
Under the MRFA model being considered, the Rafale aircraft will be manufactured in India by French aircraft manufacturer Dassault Aviation and a local partner. France is expected to supply 18 Rafale aircraft in flying condition, and the remaining 96 aircraft will be manufactured in India. The talks with France are focused on indigenization of the Rafale aircraft to be manufactured in India, integration of indigenous weapons, and other India-specific requirements.
The MTA program seeks to provide the Indian Air Force with 60 new transport aircraft to enhance airlift capabilities. The Air Force is expected to soon seek DAC approval for the proposed acquisition, after which a tender will be issued.
Among the companies competing for the order are the American company Lockheed Martin with its C-130J Super Hercules aircraft, the Brazilian aircraft manufacturer Embraer, which has offered its KC-390 Millennium aircraft to India, and the European company Airbus Defense and Space with its A-400M aircraft.
The three-corner competition will be in line with the government’s ‘Make in India’ initiative to promote self-reliance in the defense manufacturing sector – and the winner will set up an aircraft production line in India.
The American company has teamed up with Tata Advanced Systems Limited (TASL), and Embraer has teamed up with Mahindra to bid for the contract. But Airbus has not yet announced its partner. The C-130J can carry a payload of 20 tons, compared to 26 tons for the KC-390 and 37 tons for the A-400M.
