India is set to conclude several major contracts for the Indian Air Force (IAF) in the financial year 2026-27, including deals for 114 Rafale fighter jets, up to 60 Medium Transport Aircraft (MTA), and additional Airborne Early Warning and Control (AEW&C) systems, the Defence Ministry informed a parliamentary panel.
“There is an increase of 37.03% in IAF’s capital budget as compared to budget estimates for 2025-26. The allotted funds are planned to be utilised against some of the major new schemes like multi-role fighter aircraft (referring to proposed Rafale deal), combat enablers (AEW&C, Tejas MK1A), Medium Transport Aircraft (MTA) and medium-altitude long-endurance RPA (remotely piloted aircraft), in addition to the ongoing committed liabilities,” the ministry told the Parliamentary Standing Committee on Defence, which submitted its latest report in the Lok Sabha last week.
Rafale Jets and Medium Transport Aircraft Plans
In February 2026, the Defence Acquisition Council (DAC) cleared the purchase of 114 Rafale jets under the Multi-Role Fighter Aircraft (MRFA) programme. The proposed deal, which includes the jets and military hardware, is estimated at around Rs 3.25 lakh crore. Under the MRFA model, the new Rafales will be manufactured in India by Dassault Aviation in collaboration with an Indian partner.
The Defence Acquisition Board also approved a plan to procure 60 Medium Transport Aircraft (MTA), estimated at Rs 1 lakh crore, to replace the aging An-32 fleet. The programme calls for 12 aircraft in fly-away condition and 48 to be manufactured locally. Top contenders include Embraer C-390 Millennium, Lockheed Martin C-130J Super Hercules, and Airbus Defence and Space A-400M.
“Keeping in view the modernisation of the armed forces, especially in the current geo-political scenario, the committee urges the air force to gainfully utilise the allocated funds for modernisation and technological upgradation in armament and in the procurement of other vital platforms,” the report said.
Combat Enablers and Self-Reliance Initiatives
“Critical combat enablers like AEWACs, flight refuellers and special electronic intelligence and surveillance platforms are vital… These systems not only enhance our intelligence and battlefield transmission but also provide commanders with modern warfare’s electronic order of battle information. All these combat intelligence systems are extremely effective platforms for enhancing the combat capability of all three services,” the ministry told the committee.
The report also highlighted the IAF’s focus on self-reliance. “In order to spearhead innovation and indigenisation, the IAF has formed a new directorate, named Directorate of Aerospace Design (DAD). This directorate actively interacts with industries, R&D institutions and academia to ascertain niche technologies in the aerospace domain and evolve modus operandi to convert them into tactical and strategic war fighting solutions, utilising indigenous resources,” it said.