India is set to reform its defense procurement policy by allowing wholly owned subsidiaries of foreign defense companies to be recognized as Indian vendors. This change, discussed by a special task force led by former cabinet secretary Rajiv Gauba since August 2025, aims to simplify procurement, reduce bottlenecks, and align with the Atmanirbhar Bharat initiative. The new policy will level the playing field between local companies and foreign subsidiaries, encouraging global giants like Lockheed Martin and Boeing to establish operations in India. Proposed reforms include transitioning from nomination-based to open tendering systems, enhancing private sector participation, and standardizing requests for proposals. This overhaul, expected to be finalized before the 2026 budget, may unlock investments of $10-15 billion over the next decade, boosting domestic manufacturing and technology transfer. Critics emphasize the need for safeguards to ensure genuine indigenization and protection for indigenous firms & existing JVs. These reforms complement recent measures such as the Defence Procurement Manual 2025, which promotes innovation and ease of doing business for domestic defense manufacturers, supporting India’s ambition to build a robust, self-reliant defense ecosystem.