The Defence Acquisition Council (DAC), chaired by Defence Minister Arun Jaitley, discussed the strategic partnership model on Monday but no final decision was taken, said informed sources.
Sources said the discussions went in a "positive direction".
"Substantial ground has been covered and things are moving forward," a source said.
The issue is to be taken up for discussion soon again.
Jaitley had on Thursday held a meeting with representatives from the industry over the proposed Strategic Partnership model.
As per sources, unlike the recommendations of the committee under former DRDO chief V.K. Atre, Defence Ministry may not unilaterally nominate a Strategic Partner in the identified segments but a two-stage selection process will be put in place.
Under this process, a pool of six Indian companies will be created, and based on competition, a one of them will be selected as the Strategic Partner.
One company can only be the strategic partner for one segment.
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