A vast array of specialised substances such as chemicals, alloys, high grade steel and finished products engineered specifically for military use or defense applications are considered as military-grade materials. | Photo Credit: ANI

The Ministry of Defence (MoD) is evaluating an industry proposal to introduce incentives in the proposed Defence Acquisition Procedure 2026 for boosting domestic procurement of military-grade materials which is in sync with the government’s overall effort to tackle its rare earth dependence.

A vast array of specialised substances such as chemicals, alloys, high grade steel and finished products engineered specifically for military use or defence applications are considered as military-grade materials.

They have multiple applications across aerospace, such as use of components like carbon-fibre composites and advanced titanium or aluminium-lithium alloys for making structures. Likewise, amorphous silica felt is one of the materials used in missiles, rockets and drones for thermal protection systems, and chemicals with resilience and strength are required for naval platforms to protect from corrosion in the ocean.

Sources privy to the developments told businessline that a similar attempt was made when DAP 2020 was getting formulated but it could not find a mention in the Procedure owing to the prevailing situations at that point of time. “It could not fructify because of lack of domestic availability of military-grade materials in adequate quantities and were costly too so it made sense for the industry to import them,” said sources.

widely revised

The DAP 2020 has been widely revised through incremental amendments and is currently in the process of being replaced by the comprehensive DAP 2026, expected to be out in the next 30 to 40 days.

Now the MoD, apart from mapping the entire domestic companies engaged in defence works, is also trying to do a head count to genuinely identify the capability of indigenous military-grade dealing firms.

Some of the known public and private companies manufacturing military materials include -- PSU Mishra Dhatu Nigam Ltd (MIDHANI), Kerala government owned Kerala Minerals and Metals Ltd (KMML), Kalyani Group’s Saarloha Advanced Materials, PTC Industries, MKU Ltd and SMPP Private Ltd.

The industry has proposed to the MoD to incentivise in monetary terms local manufacturing and sourcing of military-grade materials. A bidder will stand to gain in the process to become L1, if he procures indigenously for his products, sources pointed out.

Also suggested is the ‘Buyer Nominated Model’, which is a supply chain strategy where the ultimate buyer (the client or original equipment manufacturer - OEM) selects and directs which specific suppliers or materials a contract manufacturer (CM) or prime contractor must use. This is different from the usual practice of allowing the subcontractor or factory to choose their own vendors for raw materials, parts, or services.

For such procurements, if the proposal gets accepted to become part of the revised DAP 2026, tenders will have a list of domestic companies supplying military-grade materials.

The growth of indigenous military-grade material supply firms will also add to overall defence exports -- the industry sources stated, citing the example of MIDHANI which is part of the global aerospace companies supply chain.

The aerospace and defence materials global market size is estimated between $30.18 billion and $50.19 billion, depending on if commercial aerospace composites are included. It is, however, projected to expand significantly, reaching up to $86.75 billion by 2033 with a compound annual growth Rate (CAGR) of over 7 per cent.

Published on June 3, 2026