India

A. Introduction The trajectory of arbitration reform in India has been marked by a sustained effort to reconcile two competing imperatives: the need for expedition and the necessity of judicial oversight. The introduction of Section 29A into the Arbitration and Conciliation Act, 1996 (“Act”), through the 2015 amendment, was conceived as a response to endemic delays in arbitral proceedings. The provision imposed a strict timeline for rendering of arbitral awards and subjected any extension of time to judicial scrutiny. While this innovation reflected a legislative commitment to efficiency, it simultaneously introduced a layer of court supervision that sits uneasily with the principle of party autonomy. Within this framework, a significant interpretive difficulty emerged regarding the identity of the “Court” competent to extend the mandate of the arbitral tribunal. The continuing problem is not merely semantic but structural. It concerns the distribution of judicial authority between courts exercising jurisdiction under Section 11 and those falling within the definition contained in Section 2(1)(e) of the Act. Section 29A of the Act was introduced to ensure time-bound completion of arbitral proceedings by empowering courts to extend the mandate of the arbitral tribunal and, where necessary, substitute arbitrators. However, the provision does not independently define the term “Court.” Section 2(1)(e) defines “Court” as the Principal Civil Court of original jurisdiction in a district, or the High Court exercising original civil jurisdiction, depending on the nature of the arbitration. The interpretative conflict arises because Section 11 vests the power to appoint arbitrators exclusively in the Supreme Court or the High Courts, thereby raising the question whether the same court must also exercise powers under Section 29A of the Act. In this context, the Hon’ble Supreme Court, in its judgment delivered on 29 January 2026 in Jagdeep Chowgule v. Sheela Chowgule & Ors[1]., (“Jagdeep Chowgule”) has addressed this issue and, in doing so, clarified the ambiguity and reshaped the jurisdictional contours of Indian arbitration law. B. Factual Matrix The dispute emanated from a Memorandum of Family Settlement dated 11 January 2021, executed among members of the Chowgule family, which sought to resolve internal disputes and provided for arbitration as the mechanism for resolving any future disagreements. However, differences resurfaced, leading to invocation of the arbitration clause on 18 May 2021. An arbitral tribunal was accordingly constituted, and proceedings commenced. As is often the case in high-stakes family and commercial disputes, the arbitral proceedings did not progress within the statutory timeline contemplated under Section 29A of the Act. Section 29A mandates that an arbitral award be rendered within twelve months from the date the tribunal enters upon reference, extendable by a further six months with the consent of the parties. Beyond this period, continuation of the mandate requires judicial intervention. In the present case, delays occurred in the conduct of proceedings, and before the award could not be rendered, and complications arose within the tribunal itself. A critical development was the resignation of the presiding arbitrator, which disrupted the continuity of the arbitral process. This necessitated recourse to Section 11 of the Act, and an application was filed before the Hon’ble High Court of Bombay for appointment of a substitute arbitrator. The Hon’ble High Court, exercising its jurisdiction under Section 11, allowed the application on 31 October 2023 and appointed a new arbitrator, thereby reconstituting the tribunal. Parallel to this development, and crucial to the controversy at hand, an application under Section 29A(4) had already been filed before the Ld. Commercial Court at Vasco, (“Ld. Commercial Court”) on 5 August 2023, seeking extension of time for completion of the arbitral proceedings. This application was filed in anticipation of the expiry of the statutory period and was aimed at preserving the mandate of the tribunal. Following the Hon’ble High Court’s appointment of the new arbitrator, the Ld. Commercial Court proceeded to adjudicate the Section 29A application and, by order dated 2 January 2024, granted an extension of time for making the arbitral award. It was this order of the Ld. Commercial Court that became the focal point of the jurisdictional dispute. One of the respondents challenged the Ld. Commercial Court’s order by filing a writ petition before the High Court of Bombay on 8 January 2024. The principal contention was that the Ld. Commercial Court lacked jurisdiction to entertain the Section 29A application, in view of the fact that the arbitrator had been appointed by the High Court under Section 11. It was argued that the authority to extend the mandate of such an arbitrator, or to exercise ancillary powers including substitution, must vest exclusively in the High Court. The Hon’ble Single Judge of the High Court of Bombay, confronted with conflicting judicial precedents on the point, referred the matter to the Hon’ble Division Bench for authoritative determination[2]. The two questions referred to the Hon’ble Division Bench were, in essence, whether an application under Section 29A(4) would lie before the High Court or the Principal Civil Court of original jurisdiction in cases of domestic arbitration- (i) where the arbitral tribunal had been constituted by the High Court under Section 11(6), and (ii) where it had been constituted by agreement and consent of the parties under Section 11(2). The Hon’ble Division Bench, in its decision dated 7 August 2024[3], adopted a bifurcated approach. It held that where the arbitral tribunal is constituted by the High Court under Section 11(6) of the Act, an application under Section 29A(4) would lie before the High Court. Conversely, where the tribunal is constituted by agreement of parties under Section 11(2), the application would lie before the Principal Civil Court of original jurisdiction. This distinction, premised on the source of appointment, effectively created two parallel jurisdictional tracks. Following the Hon’ble Division Bench’s decision, the Hon’ble Single Judge proceeded to allow the writ petition by an order dated 21 August 2024[4], setting aside the Ld. Commercial Court’s order extending time, and granted liberty to the parties to approach the Hon’ble High Court for appropriate reliefs under Section 29A. Aggrieved by this outcome, the appellant approached the Hon’ble Supreme Court, contending that the Ld. Commercial Court was the appropriate forum under the statutory scheme and that the Hon’ble High Court of Bombay had erred in importing a distinction not contemplated by the Act. C. Position Prior to Jagdeep Chowgule Judgment The question as to which court exercises jurisdiction under Section 29A of the Act to extend the mandate of an arbitral tribunal had, for several years, generated a sharp divergence of judicial opinion across the High Courts. Two competing interpretative streams had emerged, each resting on a distinct reading of the statutory framework. The first stream, represented by decisions in Mormugao Port Trust v. Ganesh Benzoplast Ltd.[5], M/s A'Xykno Capital Services Private Ltd. v. State of UP[6] and Dr. VV Subbarao v. Dr. Appa Rao Mukkamala & Ors.[7], took the position that the expression "Court" in Section 29A must bear the meaning assigned to it under Section 2(1)(e) of the Act, that is, irrespective of whether the arbitral tribunal was constituted by the Hon’ble Supreme Court or the Hon’ble High Courts under Section 11(6) or by consent of the parties under Section 11(2) of the Act. According to this view, once an arbitrator has been appointed through the judicial process, the appointing court becomes functus officio and all subsequent applications seeking extension of mandate under Section 29A, must be instituted before the Court as defined in Section 2(1)(e). These decisions further clarified that where the legislature intended to delineate jurisdictions, they had expressly excluded Civil Court jurisdiction in specific provisions such as Sections 47 and 57, and that no such exclusion existed in respect of Section 29A. The second and more expansive stream took a markedly different approach. The Hon’ble High Courts of Gujarat, Delhi, Bombay, Calcutta, and Allahabad, in several decisions including Nilesh Ramanbhai Patel v. Bhanubhai Ramanbhai Patel[8], Cabra Instalaciones Y. Servicios v. Maharashtra State Electricity Distribution Co. Ltd.[9], DDA v. Tara Chand Sumit Construction Co.[10], have held that where the arbitral tribunal had been constituted by the High Court under Section 11(6), an application under Section 29A could not lie before a Civil Court. The primary issue in these decisions was the perceived jurisdictional anomaly that would arise if a Civil Court, lower in the judicial hierarchy to the High Court, were empowered to extend or substitute the mandate of an arbitrator appointed by the High Court. It was reasoned that the exclusive power of appointment under Section 11, being vested in the Hon’ble High Court or the Hon’ble Supreme Court, the ancillary powers of extension or substitution must correspondingly vest in the same authority. To arrive at this conclusion, these decisions invoked the qualifying phrase "in this Part, unless the context otherwise requires" in Section 2(1) of the Act, reading "Court" in Section 29A for the purpose of extension of the mandate of the arbitral tribunal contextually to mean the appointing court rather than the court as defined in Section 2(1)(e). This bifurcation of judicial opinion created considerable uncertainty for practitioners and parties alike. The Division Bench of the High Court of Bombay at Goa, in the proceedings that gave rise to the present appeal, itself adopted a variant of the second approach, holding that the forum for a Section 29A application depended on whether the tribunal had been constituted by the High Court under Section 11(6) or by the parties themselves under Section 11(2). It was against this backdrop of such doctrinal confusion that the Supreme Court was called upon to authoritatively settle the question. D. The Jagdeep Chowgule Judgment: The Apex Court’s Analysis I. Reframing the Question: At the outset, the Hon'ble Supreme Court made a significant observation regarding the manner in which the questions had been framed before the Division Bench. The Apex Court noted that there was, in fact, no need to bifurcate the question into two, i.e., one for tribunals constituted by the High Court under Section 11(6) and another for tribunals constituted by agreement of parties under Section 11(2). The Apex Court observed that this perceived duality in the appointment process was itself the source of divergent judicial opinions, and that by asking the wrong questions, the Division Bench had arrived at incorrect conclusions. The reframed question, as the Apex Court succinctly articulated it, was simply that if an arbitral tribunal, whether appointed by the High Court or by the parties, does not complete proceedings within the required or extended time limit, can an application to extend time under Section 29A be filed before the Hon’ble High Court or the Ld. Civil Court? II. Nature and Scope of Jurisdiction under Section 11 of the Act: A foundational aspect of the Apex Court's reasoning concerns the nature of the jurisdiction exercised under Section 11 of the Act. The Apex Court reiterated that the power of appointment conferred on the Chief Justices of High Courts and of the Hon’ble Supreme Court under Section 11 was deliberately vested in the highest judicial authority in the State and the country, not with a view to conferring supervisory control over the arbitral process, but to add credibility to the constitution of the arbitral tribunal. The Apex Court relied on its earlier decision passed in SBP and Co. v. Patel Engineering Ltd.[11], where the co-ordinate Bench had explained this purpose with clarity. Critically, the Apex Court held that the jurisdiction under Section 11 stands exhausted upon the constitution of the arbitral tribunal. Once the appointment is made, the referring court becomes functus officio and retains no residual supervisory or controlling power over the arbitral proceedings. The Court expressly cautioned against conflating appointment with supervision, observing that to read Section 11 as conferring an enduring supervisory role upon the appointing court would be contrary to both the statutory scheme and the consistent line of precedent on the subject. This clarification directly undermines the premise that the High Court, having appointed the arbitrator, must also control subsequent procedural aspects such as extension of time. III. Rejection of the Hierarchy Argument: The Apex Court held that interpretation based on perceptions of the status or hierarchy of courts is fundamentally opposed to the rule of law. The Apex Court emphasized that jurisdiction flows solely from the law of the land, and that the conferment of jurisdiction is possible either by the provisions of the Constitution or from specific legislative provisions and cannot be assumed or expanded on the basis of a court's institutional standing. Reliance was placed on decisions in A.R. Antulay v. R.S. Nayak[12] and State of Jharkhand & Ors. v. Hindustan Construction Co. Ltd.[13], amongst others, which affirmed the principle that a superior court cannot assume jurisdiction on the ground that it is a higher court. The approach of the second stream of decisions, grounded as it was, in considerations of hierarchy and perceived anomaly rather than statutory text, was accordingly disapproved. IV. The Statutory Definition of “Court” under Section 2(1)(e): Turning to the core question of statutory interpretation, the Apex Court reaffirmed the well-settled principle that a defined term must ordinarily bear the meaning assigned to it in the interpretation clause, unless the context otherwise requires. The Court drew attention upon  the decision passed in State of West Bengal v. Associated Contractors[14], where a three-judge bench had held that Section 2(1)(e) contains an exhaustive definition, identifying only the Principal Civil Court of original jurisdiction in a district, or the High Court in exercise of its ordinary original civil jurisdiction, as "Court" for the purposes of Part I of the Act and that no other court falls within that definition. In the absence of any contextual indicia warranting a departure from the statutory definition, the Court concluded that the expression "Court" in Section 29A must be accorded with the meaning assigned to it under Section 2(1)(e) of the Act. V. Inapplicability of Section 42 of the Act: Further, the Apex Court clarified that Section 42, which centralises jurisdiction in one court for all applications arising out of an arbitration agreement, does not apply to proceedings under Section 11, since such proceedings are not instituted before a “Court” as defined in Section 2(1)(e). Consequently, the High Court’s involvement under Section 11 does not confer exclusive jurisdiction on subsequent applications under Section 29A. E. Decision of the Hon’ble Supreme Court Applying the aforesaid principles to the facts of the present case, the Hon’ble Supreme Court, in its decision, authoritatively held that the Ld. Commercial Court, being the “Court” of competent jurisdiction within the meaning of Section 2(1)(e) of the Act, was fully competent to entertain and adjudicate the application seeking extension of time under Section 29A(4). The Apex Court underscored that the jurisdiction under Section 29A is statutorily anchored to the definition of “Court” under Section 2(1)(e), and is not dependent upon, nor altered by, the forum that may have exercised powers under Section 11 for appointment of an arbitrator. In that context, the Apex  Court held that the earlier intervention of the Hon’ble High Court under Section 11, which was confined solely to the appointment of a substitute arbitrator following the resignation of the presiding arbitrator, did not in any manner divest the Commercial Court of its jurisdiction under Section 29A, nor did it confer any continuing supervisory jurisdiction upon the High Court over all subsequent matters arising in the arbitral proceedings. The Apex Court also observed that the function discharged by the appointing court under Section 11 is limited and exhausted upon constitution or reconstitution of the arbitral tribunal, and such court does not, merely by making the appointment, become the forum for all later applications connected with the arbitration. The Hon’ble Supreme Court rejected the reasoning that the court exercising Section 11 jurisdiction must necessarily be approached for extension of mandate under Section 29A, holding such interpretation to be contrary to the statutory scheme and destructive of the clear distinction maintained by the Act between appointment jurisdiction and supervisory jurisdiction over arbitral proceedings. It was emphasized that Section 29A constitutes a self-contained provision, and the power to extend the tribunal’s mandate under sub-section (4), as well as the ancillary power to substitute arbitrators under sub-section (6), are vested in the same “court” as defined under Section 2(1)(e). The power of substitution, the Court clarified, is merely consequential and incidental to the principal power of extension and cannot be construed as creating an independent jurisdictional basis in favour of the court that appointed the arbitrator under Section 11. In this backdrop, the Apex Court held that the Ld. Commercial Court had rightly exercised jurisdiction in extending the time for making the arbitral award and that the interference by the Division Bench, premised on lack of jurisdiction, was legally unsustainable. The Hon’ble Supreme Court accordingly allowed the appeals, set aside the judgment and order dated 7 August 2024 passed by the Division Bench, as also the subsequent order dated 21 August 2024 passed by the Hon’ble Single Judge, and restored the order dated 2 January 2024 of the Ld. Commercial Court, extending the period for rendering the arbitral award. While doing so, the Apex Court also granted liberty to the parties to approach the Ld. Commercial Court for any further extension that may become necessary under Section 29A(5), directing that such application, if made, be considered on its own merits, upon hearing all parties, and appropriate orders be passed in accordance with law. Through this ruling, the Hon’ble Supreme Court conclusively clarified the jurisdictional framework governing Section 29A applications and reinforced that the court competent under Section 2(1)(e), and not the Section 11 appointing court, remains the proper forum for extension and all incidental orders concerning the arbitral mandate. F. Conclusion The Hon’ble Supreme Court’s decision represents a significant and, in many respects, a landmark pronouncement on the jurisdictional architecture governing Section 29A of the Act. By unequivocally anchoring the expression “Court” in the statutory definition contained in Section 2(1)(e), the Apex Court has resolved a long-standing area of interpretive uncertainty and brought considerable doctrinal clarity to a provision that had generated divergent judicial approaches. In doing so, the judgment reinforces the primacy of the statutory scheme of the Act and restores coherence to the distribution of jurisdictional powers between courts exercising appointment jurisdiction under Section 11 and courts exercising supervisory jurisdiction over arbitral proceedings. From the standpoint of arbitral jurisprudence, the ruling is likely to have enduring significance in ensuring greater uniformity and predictability in applications seeking extension of mandate and allied reliefs under Section 29A. At the same time, the judgment also brings sharper focus into certain deeper structural tensions embedded within India’s arbitration framework. While the Apex Court’s emphasis on textual fidelity and statutory discipline is jurisprudentially sound, it also invites reflection on whether a strictly definitional approach may, in some cases, come at the expense of functional coherence and institutional efficiency. By locating supervisory powers under Section 29A exclusively in courts of original jurisdiction, the decision raises practical concerns regarding the institutional capacity of such courts to effectively discharge these responsibilities, particularly in complex, high-value arbitrations where expedition is central to the arbitral process. Questions may also arise regarding consistency in approach across different commercial courts, the possibility of fragmented supervisory practices, and whether routing such powers away from courts already familiar with the constitution of the tribunal may, in certain situations, generate procedural duplication rather than efficiency. Seen in this light, the judgment is not merely a resolution of a jurisdictional controversy but also a reminder of the broader challenges confronting arbitration reform in India. It underscores that statutory clarification, while necessary, cannot by itself guarantee arbitral efficiency unless accompanied by corresponding institutional strengthening and procedural rationalisation. The decision therefore invites a more holistic engagement with arbitration reform, one that moves beyond resolving textual ambiguities and addresses the practical realities of judicial infrastructure, case management, and the design of supervisory mechanisms. Ultimately, while Jagdeep Chowgule marks an important step toward doctrinal certainty, simultaneously it exposes the continuing need to reconcile statutory clarity with institutional functionality, without which the aspiration of a truly efficient and arbitration-friendly legal framework may remain only partially fulfilled. This Update has been prepared by Amit Kumar Nag, Swarajit Dey, Ranjabati Ray,  and Saptarshi Kar, who can be reached at [email protected], [email protected], [email protected], and [email protected] respectively. This Update is only for informational purposes and is not intended for solicitation of any work. Nothing in this Update constitutes legal advice and should not be acted upon in any circumstance. [1] SLP (C) No. 10944-10945 of 2025 and reported in 2025 SCC OnLine SC 124 [2] Order dated April 15, 2024, in Writ Petition No. 88 of 2024 and reported in 2024 SCC OnLine Bom 1069 [3] Order dated August 7, 2024, in WP No. 88 of 2024 [4] Order dated August 21, 2024, in WP No. 88 of 2024 and reported in 2024 SC OnLine Bom 4567 [5] 2020 SCC OnLine Bom 11821 [6] 2023 SCC OnLine All 2991 [7] (2024) 1 HCC (AP) 94 [8] 2018 SCC OnLine Guj 5017 [9] 2019 SCC OnLine Bom 1437 [10] 2019 SCC OnLine Del 2501 [11] (2005) 8 SCC 618 [12] (1988) 2 SCC 602 [13] (2018) 2 SCC 602 [14] (2015) 1 SCC 32

DMD Advocates is advising Juno Joule Green Energy Private Limited (Juno Joule) in connection with its collaboration including execution of a Front-End Engineering and Design (FEED) Engineering Services Agreement (FEED Agreement) with thyssenkrupp nucera India Private Limited (thyssenkrupp nucera India), a subsidiary of thyssenkrupp nucera AG & Co. KGaA, a globally leading provider of high-efficiency electrolysis technologies. Pursuant to the FEED Agreement, thyssenkrupp nucera India aims to design an integration concept for ‘Alkaline Water Electrolysis’ into Juno Joule's proposed 260-megawatt green hydrogen facility in India, and it is thyssenkrupp nucera India’s first Indian green hydrogen project. Following this phase, the partners will explore next steps, including a potential Engineering, Procurement, and Fabrication contract. The DMD team included Pallavi Puri (Partner), Abin Francis (Counsel), Aishwarya Gupta (Senior Associate), and Srishti Pandey (Associate), with strategic inputs from Rashi Dhir (Senior Partner & Head of Corporate). ***

The Delhi High Court has issued notice in a writ petition seeking directions to ensure accessibility of the FIFA World Cup 2026 broadcast in India through the free-to-air public broadcasting plat form Prasar Bharati.  The petition highlights that the FIFA World Cup has been notified as a “Sporting Event of National Importance” under the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007. It has been submitted that despite the tournament being scheduled to commence on 11 June 2026, no broadcaster has yet acquired the broadcasting rights for India, thereby raising concerns regarding public access to one of the most widely viewed sporting events globally. Appearing on behalf of the Petitioner, Senior Advocate Vaibhav Gaggar submitted that access to sporting events of national importance forms part of the constitutional right to receive information under Article 19(1)(a) of the Constitution of India, and failure to broadcast the tournament would amount to a violation of citizens' constitutional rights under Articles 14, 19(1)(a) and 21. The submissions further drew attention to Section 12 of the Prasar Bharati Act, 1990, which mandates fair, balanced and adequate coverage of sports and events of national importance in furtherance of public interest broadcasting. The petition under Article 226 of the Constitution of India has been filed by Advocate Avdhesh Bairwa and is being represented by Hammurabi & Solomon Partners under the guidance of Shweta Bharti, Jyoti K. Chaudhary and Rohit Jolly.  The matter is being led by Senior Advocate Vaibhav Gaggar along with the Firm’s team comprising: Ankit Konwar, Avdhesh Bairwa, Subhashni Kumari, Prateek Singh, Nishi  Rathore and Nishi Kashyap. The matter raises important questions concerning sports broadcasting regulation, constitutional freedoms and public access to events of national importance.

India’s defence procurement framework has undergone a major shift from import-led acquisition towards indigenous manufacturing, localisation and technology engagement. The Strategic Partnership Model (“SPM”), originally introduced under the Defence Procurement Procedure, 2016and subsequently incorporated into the Defence Acquisition Procedure, 2020 (“DAP 2020”), reflects the Government of India’s long-term policy objective of establishing domestic defence industry capable of manufacturing complex defence products in India with foreign collaboration. Under the present framework, foreign original equipment manufacturers (“OEM(s)”) seeking participation in major defence procurement programmes are increasingly required to collaborate with Indian entities through long-term industrial arrangements involving licensed production, transfer of technology, localisation of supply chains and indigenous manufacturing commitments. The policy objective of the Indian government is no longer limited to procurement of defence equipment. Instead, the emphasis has shifted towards establishment of a domestic defence industrial sector with participation from private sector players, focussing on capability development and gradual technological self-reliance. Policy Evolution of SPM SPM was initially introduced pursuant to the approval of the Defence Acquisition Council in 2017and incorporated as Chapter VII of the Defence Procurement Procedure, 2016. The Ministry of Defence (“MoD”) clarified that the model was intended to institutionalise a transparent and objective mechanism to encourage participation of the Indian private sector in manufacturing defence products such as fighter aircraft, helicopters, submarines and armoured fighting vehicles. DAP 2020 retained and strengthened this framework, and expressly recognised acquisitions under SPM as arrangements involving participation of private Indian firms together with foreign OEMs under the “Make in India” initiative. The said framework intends the Indian strategic partner to act as the system integrator while recognising development partners, specialised vendors and suppliers, particularly from micro, small and medium enterprises (MSME). SPM must therefore be viewed alongside broader policy measures introduced under DAP 2020, including prioritisation of procurement categories favouring indigenous content, introduction of the “Buy (Global – Manufacture in India)” category, increased emphasis on domestic manufacturing and localisation, rationalisation of offset obligations and encouragement for technology transfer and indigenous capability development. These reforms collectively reflect a procurement philosophy where foreign participation is permissible but increasingly tied to local manufacturing commitments and industrial collaboration with Indian entities. Structure of SPM Under SPM, the MoD identifies specific defence segments eligible for acquisition, where Indian private sector entities are shortlisted as strategic partners based on financial, technical and infrastructure capability criteria. Foreign OEMs are separately evaluated on the basis of technological capability, willingness to transfer technology, manufacturing strength and ability to support indigenisation. The model effectively creates a long-term tripartite industrial structure involving MoD as the procuring authority, the Indian strategic partner as the domestic system integrator and the foreign OEM as the technology and platform provider. The selected Indian strategic partner is expected to establish manufacturing capability in India, integrate domestic suppliers and progressively enhance indigenous content. The foreign OEM, in turn, is expected to provide technology access, manufacturing support, training and technical collaboration. Unlike conventional procurement contracts involving direct imports, SPM seeks to establish long-term domestic manufacturing capability through industrial cooperation. Mandatory Indian Partnership Structure A central feature of SPM is that foreign OEMs do not participate independently in procurement programmes (falling within the SPM framework). Instead, participation is structured through partnership with an eligible Indian strategic partner. The framework under DAP 2020 lays continuous emphasis on the role of the Indian entity as the principal integrator and manufacturer. This approach aligns with India’s broader defence industrial policy, including the “Aatmanirbhar Bharat” initiative and localisation-focused procurement priorities. The requirement for Indian participation also aligns with India’s foreign direct investment policy in the defence sector. While significant foreign investment is permitted in defence sector (upto 74% through automatic route and beyond 74% through government route on a case-by-case basis), procurement eligibility under indigenous procurement categories and strategic partnership structures continues to place significant emphasis on Indian ownership, control and domestic manufacturing capability. Recent policy discussions surrounding the proposed Defence Acquisition Procedure, 2026framework further indicate that the Government intends to maintain a distinction between Indian vendors and Indian subsidiaries of foreign OEMs. The policy direction therefore continues to favour domestic industrial control and indigenous manufacturing capacity. Requirement of Technology Transfer Technology transfer occupies a critical position within SPM. The objective is not limited to assembly operations or licensed manufacturing. Instead, the framework seeks gradual transition to advanced manufacturing capability, integration know-how, maintenance capability and support infrastructure within India. Under DAP 2020, foreign OEMs participating in strategic partnership procurements are evaluated on factors such as the extent of technology transfer, depth of indigenisation, manufacturing capability creation in India, lifecycle support commitments, support for domestic supply chains and long-term sustainment capability. The policy therefore incentivises foreign OEMs willing to share meaningful manufacturing and technical capability with Indian partners. In practice, technology transfer arrangements under defence collaborations may include licensed manufacturing rights, transfer of technical documentation, manufacturing process know-how, tooling and testing capability, integration capability, training and technical assistance, maintenance, repair and overhaul (MRO) capability and support for indigenous sourcing and localisation. However, the scope and depth of transfer continue to remain commercially negotiated and subject to export control restrictions imposed by the foreign OEM’s home jurisdiction. License Production and Local Manufacturing Licensed production arrangements remain one of the most common legal and commercial structures applicable under Indian defence collaborations. Under such arrangements, the foreign OEM authorises the Indian strategic partner to manufacture equipment or subsystems in India pursuant to technology licensing agreements and manufacturing assistance arrangements. DAP 2020 encourages domestic manufacturing through multiple acquisition categories, including Buy (Indian - IDDM), Buy (Indian), Buy and Make (Indian), Buy (Global - Manufacture in India) and SPM procurements, which conditions acquisitions on local manufacturing vendors. Accordingly, foreign OEMs mandatorily require local manufacturing capability if they intend to remain competitive in Indian defence procurement markets. The “Buy (Global – Manufacture in India)” category is particularly significant because it allows foreign vendors to establish manufacturing arrangements in India through subsidiaries or joint ventures while complying with indigenous manufacturing requirements. At the same time, strategic partnership procurements continue to favour collaboration with Indian system integrators capable of achieving progressive localisation. Given the long operational lifecycle of defence products, contractual arrangements typically extend beyond immediate manufacturing obligations and include long-term maintenance, upgrades, servicing and sustainment support. Shift from Pure Imports to Industrial Collaboration The overall trajectory of Indian defence procurement policy highlights a gradual movement away from direct imports towards domestic capability creation. SPM reflects this transition most clearly. Foreign OEMs are no longer evaluated solely on capability or pricing. Increasingly, evaluation also depends on willingness to manufacture in India, localisation commitments, technology transfer depth, support for indigenous ecosystems, long-term industrial investment and partnership capability with Indian industry. Consequently, foreign OEMs seeking long-term access to the Indian defence market must increasingly adopt collaborative industrial structures rather than transactional export-led models. Conclusion SPM represents one of the most significant structural reforms in India’s defence procurement system. It indicates the intent of the Indian government to transform India from a defence importer into a manufacturing and technology development hub. Under DAP 2020, foreign OEM participation in major defence programmes is linked with domestic industrial collaboration, technology transfer and localisation commitments. The framework encourages long-term partnerships between foreign technology providers and Indian strategic partners, with the latter expected to emerge as system integrators capable of supporting indigenous manufacturing requirements. For foreign OEMs, market access in India therefore increasingly depends on their ability to partner effectively with Indian industry, structure commercially viable technology transfer arrangements and support progressive indigenisation. For Indian industry, SPM creates an opportunity to participate in high-value defence manufacturing programmes, engage advanced technologies and develop long-term domestic industrial capability. As India continues to recalibrate its defence acquisition priorities towards self-reliance and indigenous manufacturing, SPM is likely to remain central to the future evolution of India’s defence procurement framework. Authors: Mr. Uday Singh Ahlawat - Managing partner Ms. Ishita Goel - Associate